The government has announced the reinstatement of Winter Fuel Payments for pensioners in England and Wales for winter 2025–26, reversing the previous year's cuts. Around nine million pensioners are expected to benefit from this decision, with payments of £200 per household or £300 for households where someone is aged 80 or over.

Eligibility will be based on age and income. Anyone who has reached State Pension age by the qualifying week of 15 to 21 September 2025 and earns £35,000 or less will receive the payment automatically. Pensioners with higher incomes will still receive the payment but may have it recovered through the PAYE or Self-Assessment systems. Alternatively, they can opt out of receiving the support altogether.

The move is part of a broader attempt to provide targeted help to those most in need while managing public finances responsibly. The scheme is expected to cost around £1.25 billion, but by introducing means-testing for higher earners, the government aims to save approximately £450 million compared to the previously universal scheme.

The decision follows public concern about last year’s removal of the payment, which had a significant impact on many lower-income pensioners. It has been welcomed by pensioners' groups and campaigners who argued that older people should not be left without support during the winter months.

In a significant update, the UK government has unveiled a new compensation scheme targeting individuals affected by the earlier “Capture” software, used in over 2,000 Post Office branches during the 1990s. This programme aims to redress those who suffered financial losses prior to the widely known Horizon IT scandal.

Background on Capture

Before Horizon, the Post Office operated the Capture system during the mid-1990s. This legacy software generated accounting records that later allegations suggest were sometimes erroneous, triggering investigations and prosecutions of postmasters, even though the data was flawed.

Scheme details and timeline

The scheme is scheduled to launch in autumn 2025. It will begin with a pilot phase involving around 150 applicants, allowing processes to be refined before a wider rollout. The focus will be on providing fair compensation for financial shortfalls suffered due to faulty Capture software between 1992 and 2000.

Context within broader Post Office compensation efforts

To date, over £1 billion has been paid to more than 7,300 postmasters who suffered losses under the Horizon system. The Horizon Shortfalls Scheme Appeals process also began in May 2025. Although these efforts have been significant, they have only addressed Horizon-era cases. Victims of the earlier Capture system have, until now, received no compensation.

Why this matters

This announcement is a key step toward justice for early victims. A previously unreleased independent report has recently resurfaced, highlighting flaws in the Capture system and renewing pressure on the Post Office and government to act. Parliament’s business and trade committee has urged the Post Office to disclose all records relating to Capture convictions and prosecutions.

Government comment

The Department for Business and Trade has stated that the scheme will be fair and accessible. It is intended to deliver swift redress, with initial payments expected in autumn 2025. This move complements the existing Horizon redress work, which has already delivered over £1 billion in compensation.

Looking ahead

Applications for the Capture scheme will open in autumn 2025, starting with a smaller pilot group before full implementation. Detailed guidance and application forms will be issued in due course. The Post Office is expected to cooperate fully by releasing all relevant documents to support claims and help correct the historical record.

You could earn up to £18,570 in tax-free savings interest in 2025–26, thanks to the personal allowance, starting rate for savings, and the Personal Savings Allowance.

If your taxable income for the 2025–26 tax year is less than £17,570, you will not pay tax on the interest you receive. This figure combines the £5,000 starting rate for savings (taxed at 0%) with the £12,570 personal allowance.

In addition, the Personal Savings Allowance (PSA) provides further tax-free savings interest: basic-rate taxpayers can earn up to £1,000 in interest tax-free, while higher-rate taxpayers can earn up to £500. Those who pay the additional rate of tax on income over £125,140 are not eligible for the PSA. This means that a basic-rate taxpayer with no other income could receive up to £18,570 in tax-free interest.

It's important to understand that if your total non-savings income exceeds £17,570, you are no longer eligible for the starting savings rate. However, if your non-savings income falls between £12,570 and £17,570, the starting rate is reduced by £1 for every £1 your income exceeds your personal allowance.

Interest earned from ISAs or premium bond winnings is not included in these thresholds and remains tax-free. Those with higher savings in tax-free accounts can continue to benefit from their applicable PSA.

Banks and building societies no longer deduct tax from interest payments automatically. If you do owe tax on savings income, you must declare it through a self-assessment tax return.

If you’ve overpaid tax on your savings interest, you can submit a claim for a refund. Claims can be backdated up to four years from the end of the current tax year. For the 2021–22 tax year, the deadline to make a claim is 5 April 2026.

From self-employment to rental income, there are many reasons you may need to file a Self-Assessment return. Know the triggers and register with HMRC by 5 October if this is your first time.

There are a number of reasons why you might need to complete a self-assessment return. This includes if you are self-employed, a company director, have an annual income over £150,000 and / or have income from savings, investment or property.

You must file a self-assessment tax return if any of the following apply to you during the tax year:

• You were self-employed as a sole trader and earned more than £1,000 (before expenses).
• You were a partner in a business partnership.
• Your total taxable income exceeded £150,000 in the 2025–26 tax year. However, even if your income is under £150,000, other factors (such as rental income or capital gains) may still require you to file a self-assessment return.
• You had to pay Capital Gains Tax on the sale or disposal of assets.
• You were liable for the High Income Child Benefit Charge.
• You had other sources of untaxed income, such as:
  • Rental income from property
  • Tips or commission
  • Savings and investment income (including dividends)
  • Foreign income

If you need to file a self-assessment return for the first time, you must inform HMRC by 5 October following the end of the tax year. For the 2025–26 tax year (which ends on 5 April 2026), the deadline to register is 5 October 2026.

HMRC has an online tool www.gov.uk/check-if-you-need-tax-return/ that can help you check if you are required to submit a self-assessment return.

Once your income passes £100,000, your tax-free allowance starts to shrink. Between £100,000 and £125,140, the effective tax rate climbs to 60%, but smart planning can help.

If you earn over £100,000 in any tax year your personal allowance is gradually reduced by £1 for every £2 of adjusted net income over £100,000 irrespective of age. This means that any taxable receipt that takes your income over £100,000 will result in a reduction in personal tax allowances.

Your personal Income Tax allowance would therefore be reduced to zero if your adjusted net income is £125,140 or above. Your adjusted net income is your total taxable income before any personal allowances, less certain tax reliefs such as trading losses and certain charitable donations and pension contributions.

If your adjusted net income is likely to fall between £100,000 and £125,140 your £12,570 tax-free personal allowance is gradually tapered. This tapering continues until your allowance is fully withdrawn at an income level of £125,140. This effectively results in a 60% marginal tax rate on income between £100,000 and £125,140.

For example, if your adjusted net income is £110,000, you would lose £5,000 of your personal allowance. This additional £5,000 is taxed at 60% due to the combined effect of the 40% higher rate of Income Tax and the partial loss of the personal allowance.

If your income sits within this band you should consider what financial planning opportunities are available in order to avoid this personal allowance trap by trying to reduce your income below to £100,000. This can include giving gifts to charity, increasing pension contributions and participating in certain investment schemes.