State pensioners have been cautioned about a potential 'tax headache', with some finding their only way out is to forgo their winter fuel payment entirely.

Pensioners with taxable income exceeding £35,000 are in line to receive the cash injection - either £200 or £300 - but will be obliged to pay it in tax.

While most people of state pension age automatically receive between £100 and £300 towards their heating costs, HMRC will reclaim it if your income surpasses £35,000.

A tax specialist has disclosed that people can sidestep this inconvenient "tax headache" by simply opting out of the winter fuel payment, as advised by a leading tax advisory firm.

HMRC will either tweak your tax code for the 2026-27 tax year or add the amount onto your 2025-26 self-assessment tax return, according to

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