HM Revenue and Customs (HMRC) has confirmed that state pensioners with an annual income exceeding £35,000 will face additional tax charges of approximately £33 per month to repay Winter Fuel Payments, unless they choose to opt out of receiving the payments. The recovery will be carried out automatically via a change in tax code over the 2026/27 and 2027/28 tax years.
How the Tax Recovery Works
Winter Fuel Payments, worth between £100 and £300 per month with a typical payment of £200, will be clawed back from pensioners who exceed the income threshold. For those receiving a payment in each of the two tax years, HMRC will adjust the tax code for the 2027/28 tax year, resulting in an extra deduction of about £33 per month. In the current 2026/27 tax year, the monthly extra tax is around £17 for a £200 payment.
HMRC stated: "If you receive payments in the 2026 to 2027 and 2027 to 2028 tax years: Unless you opt out of receiving the payment, we’ll collect your payments for the 2 tax years by changing your tax code for the 2027 to 2028 tax year. For example, if you receive a payment in each tax year of £200, we’ll deduct about £33 per month extra in tax in the 2027 to 2028 tax year."
Timeline and Self Assessment
Recovery for the 2025/26 tax year has already begun, with letters or email notifications sent to pensioners in April confirming a change in tax code. For those filing Self Assessment online, the payment should be pre-populated in their 2025 to 2026 tax return, due by January 31, 2027. Pensioners are advised to check that the payment is included and add it manually if not. Paper filers must include it by October 31, 2026.
For payments received in the 2028/29 tax year or later, HMRC will collect the amount by adjusting the tax code for the year in which the payment is received.
Opting Out and Scam Warnings
Pensioners who wish to avoid the extra tax charges can opt out of receiving the Winter Fuel Payment. The opt-out form must be completed before 11:59pm on September 20, 2026, or by calling the Winter Fuel Payment helpline before 6pm on September 18, 2026.
The recovery applies across the UK, including Scotland (where the payment is known as the Pension Age Winter Heating Payment) and Northern Ireland (where payments were made by the DWP on behalf of the Northern Ireland Executive). In all cases, HMRC handles the recovery.
HMRC has warned pensioners to be vigilant against scams. Myrtle Lloyd, HMRC’s chief customer officer, said: "Criminals are great pretenders and often use fake letters, emails, calls and texts to impersonate HMRC and trick people into giving them money. I’d encourage anyone who’s unsure to use our online tool at GOV.UK to check whether and how their payment will be recovered – there’s no need to call us."
