The Government has confirmed that HMRC will begin collecting Winter Fuel Payments in advance from April 2027, targeting pensioners with an income above £35,000.
According to updates issued for tax agents, if an individual receiving Winter Fuel Payments in England, Wales and Northern Ireland, or the Pension Age Winter Heating Payment in Scotland, has a total income of more than £35,000, HMRC will recover the payment through the tax system. Pensioners earning £35,000 or less receive and keep the payment, while those above the threshold still get the cash upfront but HMRC automatically recovers the full amount through subsequent tax code adjustments.
How the collection will work
For PAYE customers, HMRC will automatically collect the Winter Fuel Payment through a change to their tax code unless they already file a Self Assessment tax return. The Government said these customers do not need to take any action or contact HMRC.
From April 2027, HMRC will start collecting Winter Fuel Payments in advance during the same year they are paid. This means anyone who received a 2026 to 2027 Winter Fuel Payment and has not opted out of the 2027 to 2028 payment will repay both payments at the same time.
Timing and amounts
Customers might see two Winter Fuel Payment amounts included in their tax code from January 2027, rather than April 2027 as previously communicated. This is because part of their 2026 to 2027 payment may be collected in the final months of that tax year, alongside the collection of the 2025 to 2026 payment.
No one will pay back more than they received. For a typical payment of £200 received in both years, around £30 to £33 will be deducted each month over 12 to 15 months.
Self Assessment customers
There is no change to the collection process for Self Assessment customers. They should include the Winter Fuel Payment on their return for the year in which they received it. Where possible HMRC will include this automatically for online filers, but customers should check and add it themselves if it has not been included. Paper filers will need to add the payment manually.
