Pensioners working after they reach 66 urged to check | Personal Finance | Finance
Pensioners who continue working after reaching State Pension age are being urged to keep a close eye on their total income, as some could be required to repay their Winter Fuel Payment. Under the Government’s rules updated last year, pensioners with an annual income above £35,000 are no longer entitled to keep the payment in full.
This is particularly relevant for older workers who have stayed in employment after turning 66. Any earnings from work are added to other sources of taxable income, including the State Pension, which could push some people above the £35,000 limit without realising it.
Many pensioners may assume they are comfortably below the threshold based on their salary alone. However, the WFP, typically £200, or £300 if you are older than 80, is still paid out automatically in November or December. If your total individual income for the tax year crosses £35,000 by even £1, the entire payment is clawed back.
For example, a pensioner receiving the full State Pension, now worth £12,548 a year, and earning £24,000 from employment, would have a combined income of around £35,900, placing them above the WFP threshold.
It is also important to remember that the State Pension itself is taxable, even though it is usually paid without tax being deducted. HMRC can recover any tax owed through a person’s PAYE tax code if they are still working, or through other means if they are not.
Experts have previously warned that some pensioners could unexpectedly face tax bills if they do not account for the State Pension when calculating their total annual income. As State Pension payments continue to rise under the triple lock, more retirees may find themselves edging closer to tax thresholds and benefit limits.
Anyone working beyond the age of 66 should therefore check their overall taxable income, rather than just their wages, to establish whether they could lose eligibility for the WFP and be required to repay it.
The WFP is a tax-free Government grant given to eligible pensioner households to help pay for heating costs over the winter months.
The scheme had previously given up to £300 each winter to all households with someone at state pension age. However, in winter 2024/25, it was restricted to those on Pension Credit or certain other benefits.
In 2025, the Government confirmed the WFP would be reinstated for all pensioners from winter 2025/26, though those earning over £35,000 a year will have the payment reclaimed automatically, unless they opt out.
