State pensioners with an annual income exceeding £35,000 are being charged an extra £17 per month by HM Revenue and Customs (HMRC) to recover Winter Fuel Payments issued in winter 2025 to 2026. The automatic clawback, implemented via a tax code change for the 2026 to 2027 tax year, affects nearly two million households across the UK.
How the Tax Charge Works
Winter Fuel Payments, worth between £100 and £300 depending on birth date and circumstances, were paid to eligible pensioner households last winter. For those with personal income above £35,000, HMRC is now reclaiming the full amount through monthly deductions. A typical £200 payment results in approximately £17 extra tax per month until repaid in full.
HMRC confirmed: "For a typical Winter Fuel Payment of £200, PAYE customers with income more than £35,000 will pay approximately £17 per month extra in tax during the 2026 to 2027 tax year to recover their payment."
Tax Code Adjustment Example
HMRC provided an example for a basic rate taxpayer with total income of £37,710, comprising a private pension of £25,737 and State Pension of £11,973. After receiving a £200 Winter Fuel Payment, the Personal Allowance of £12,570 is reduced by the State Pension (£11,973) and an additional £1,000 (to recover the £200 via 20% tax), resulting in a negative allowance of £403. The new tax code becomes K39, meaning extra tax on £399 of income, equating to roughly £17 more per month.
Self Assessment and Paper Returns
For pensioners in Self Assessment, the Winter Fuel Payment should be pre-populated in the 2025 to 2026 tax return for online filers, due by January 31, 2027. If not shown, it must be added manually. Paper return filers must include it by October 31, 2026. HMRC warned pensioners to check their returns carefully.
Scope and Exemptions
The recovery applies across the UK, including Scotland (where the payment is called Pension Age Winter Heating Payment) and Northern Ireland (where the DWP made payments on behalf of the Executive). Only pensioners who exceeded the £35,000 income threshold and did not opt out of receiving the payment last winter are affected. Those who opted out are not subject to clawback.
Scam Warning
HMRC urged pensioners to be on "high alert" for 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." HMRC stressed it will never contact individuals by text or email to request repayment or bank details.
Timeline and Lump Sum Payments
The extra tax charges began in April 2026, and households should have received a letter or email confirming the tax code change. Pensioners cannot repay the Winter Fuel Payment as a lump sum sooner; they must wait for HMRC to recover the amount through monthly deductions until fully repaid.
