High-income pensioners will face extra tax charges from HM Revenue and Customs (HMRC) in 2026 due to a tax code change affecting those who received a Winter Fuel Payment in 2025. The charges apply to pensioner households with an annual income of £35,000 or more who received the payment, which is worth between £100 and £300. HMRC will reclaim the full amount either by adjusting the tax code for the 2026/27 tax year or by adding it to the Self Assessment tax return. For a typical Winter Fuel Payment of £200, pensioners will pay approximately £17 per month in additional tax until the payment is fully recovered.
How the Clawback Works
HMRC has already begun reclaiming these payments, with the process starting in April 2026. Affected households should have received a letter or email confirming a change to their tax code to recover the Winter Fuel Payment. A spokesperson for financial help experts Vettory explained that many pensioners may not realise that receiving the Winter Fuel Payment does not automatically mean they will keep it. Higher-income recipients may later see the payment recovered through the tax system, which can come as an unexpected adjustment.
Income Threshold and Tax Code Adjustments
The extra charges only apply to pensioners who exceed the income threshold and did not opt out of receiving the Winter Fuel Payment last year. Pensioners will pay more tax each month until the payment is fully repaid. HMRC provided an example for basic rate taxpayers: if total income is £37,710, including a private pension of £25,737 and State Pension of £11,973, and a £200 Winter Fuel Payment was received, the Personal Allowance of £12,570 is reduced by £11,973 (State Pension) and £1,000 (to recover the £200 payment at 20% tax), resulting in a new tax code of K39. This means the pensioner pays around £17 more tax per month.
Scam Warning and Opt-Out Option
Pensioners have been warned to be on high alert for scams as the recovery process begins, with nearly two million people expected to repay their winter 2025 payment. HMRC stated it will never contact people by text or email to request repayment or bank details. Those unsure can use HMRC's online checking tool at GOV.UK to see if their payment will be reclaimed. Pensioners who expect their taxable income to exceed £35,000 can opt out of receiving the Winter Fuel Payment for 2026/27 before the deadline on September 20, 2026, to avoid future clawbacks.
