Millions of pensioners are being told to repay their Winter Fuel Payment after HMRC began sending letters to those affected. Around two million older people are expected to be caught by the clawback, having received the annual heating support automatically only to discover they must return it.
According to regulations, anyone earning more than £35,000 from employment, a private pension or savings interest is required to repay the payment in full. HMRC is contacting those impacted to inform them their tax code will be altered so the funds can be recovered.
For many, the repayment will be spread throughout the year via PAYE—the mechanism that deducts tax from wages and pensions. This means a revised tax code for the 2026/27 tax year. If you received a £200 payment, approximately £17 per month will typically be deducted from your income over the year.
Those who submit a Self Assessment tax return will have the sum added to their bill instead. Online Self Assessment returns for the 2025/26 tax year must be submitted by January 31, 2027; paper returns by October 31, 2026. If you're already registered for Self Assessment, the repayment will be recovered through that system rather than PAYE.
An HMRC spokesperson said: "The majority of people who need to pay back a Winter Fuel Payment will do so automatically via their tax code. For those already registered for Self Assessment, it will be collected via their tax return. We've provided online guidance clearly explaining how recovery of payments works, and a calculator so people can see if they'll need to pay back the payment."
The Winter Fuel Payment has traditionally been a universal safety net for elderly households managing rising energy costs. However, the £35,000 income threshold means wealthier pensioners are now being required to repay the support—even if it was issued automatically. For some, the first indication of an issue will be correspondence from HMRC and an adjustment to their tax code.
