Some pensioners could find themselves paying back two Winter Fuel Payments at the same time under changes to the way HM Revenue and Customs (HMRC) recovers the support from higher-income households.
People with total annual income above £35,000 who receive a Winter Fuel Payment have to repay the full amount through the tax system. The threshold is based on the individual's income rather than the combined income of a couple.
For people who pay tax through Pay As You Earn (PAYE), HMRC will normally recover the money by changing their tax code, meaning more tax is deducted from their income. However, official guidance confirms that the recovery of payments from different winters could overlap.
How overlapping repayments work
HMRC guidance confirms that the recovery of payments from different winters could overlap. HMRC said that if it needs to collect two Winter Fuel Payments, it will collect both through the person's tax code at the same time, resulting in them paying more tax each month.
The department gives the example of someone already repaying their 2025 Winter Fuel Payment. Their tax code could change again from January 2027 to begin recovering their 2026 payment. For someone who received £200 in both years, HMRC says this could result in them paying around £30 to £33 more tax each month while the two recoveries overlap.
Transition and new collection from 2027
The situation is part of a transition in the way Winter Fuel Payments are recovered from people whose income exceeds the £35,000 threshold. HMRC has confirmed that some customers could start seeing two Winter Fuel Payment amounts included in their tax code from January 2027, rather than April 2027 as had previously been communicated.
This is because part of the payment for winter 2026/27 may begin to be recovered during the final months of the current tax year while HMRC is still collecting the payment made for winter 2025/26. A further change will take effect from April 2027, when HMRC will begin collecting Winter Fuel Payments in advance during the same tax year in which they are paid.
This means someone who received the 2026/27 payment and does not opt out of receiving their 2027/28 payment could again be repaying two payments simultaneously. HMRC says a person's tax code will be changed in April 2027 to continue collecting the 2026 payment while also starting to collect the 2027 payment in advance.
Who has to repay Winter Fuel Payment?
Winter Fuel Payment has returned to a wider group of pensioners, but those with total income above £35,000 are required to repay it. For winter 2026/27, eligible people in England, Wales and Northern Ireland can receive between £100 and £300 depending on their age and circumstances.
Most eligible people will receive their payment automatically in November or December, with letters being sent during October and November confirming how much they are due. The £35,000 recovery threshold applies to each individual rather than a household. This means one member of a couple could have to repay their payment while the other keeps theirs.
HMRC guidance also makes clear that there is no taper once someone's income exceeds the threshold. If their total income is more than £35,000 and they are liable for the charge, an amount equal to their full Winter Fuel Payment is recovered.
People receiving certain means-tested benefits during the qualifying week, including Pension Credit, Universal Credit, Income Support, income-based Jobseeker's Allowance and income-related Employment and Support Allowance, are exempt from the charge. People who already complete a Self Assessment tax return will generally repay their Winter Fuel Payment through their tax bill instead of having their PAYE tax code adjusted.
Those expecting their income to be above £35,000 can also opt out of receiving future Winter Fuel Payments rather than receiving the money and subsequently having it recovered.
What happens in Scotland?
People in Scotland do not receive the DWP Winter Fuel Payment and instead receive Pension Age Winter Heating Payment from Social Security Scotland. However, the same £35,000 income threshold and HMRC tax recovery system applies to the Scottish payment.
HMRC's guidance confirms that the Winter Fuel Payment charge applies across the UK, including to Pension Age Winter Heating Payments made in Scotland.
