HMRC has confirmed monthly tax deductions of £33 for one group of state pensioners. The department continues to recover Winter Fuel Payments through tax code adjustments.
State pensioners earning more than £35,000 a year will see the deductions, as HMRC claws back the benefit from those who do not opt out. It applies to Winter Fuel Payments worth between £100 and £300 made during the 2026/2027 and 2027/2028 tax years. Those who get the standard £200 payment will see monthly deductions increased until the full amount is repaid.
Who is affected?
All state pensioners automatically receive Winter Fuel Payments. However, if their total income exceeds the £35,000 threshold, HMRC will recover the full value through the tax system. Anyone earning £35,001 or more must pay the entire amount back. The threshold is based strictly on personal income, so if one partner earns £40,000 and the other £20,000, only the higher earner will have their payment clawed back.
State pensioners do not need to contact HMRC or manually transfer money to repay the benefit. The department will automatically adjust their tax code, with a deduction of £17 for the typical £200 Winter Fuel Payment during the 2026/2027 tax year.
Deductions to rise
The deduction will rise to £33 a month during the 2027/2028 tax year, as HMRC recovers two years' worth of payments through a single tax code adjustment. From the 2028/2029 tax year onwards, repayments will be collected during the same tax year in which the payment is received.
HMRC said: "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."
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." She added: "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."
Opting out
State pensioners can avoid automatic tax deductions by opting out of the Winter Fuel Payment. The deadline to do so is 11.59pm on September 20, 2026.
