How HMRC Will Recover Winter Fuel Payments in 2026?

For the first time, HMRC will recover Winter Fuel Payments from pensioners with an annual income above £35,000.

Rather than asking you to send the money back directly, HMRC will change your tax code so the amount is deducted gradually during the 2026/27 tax year.

If you received a Winter Fuel Payment in winter 2025 and your individual income is over the threshold, you may have to repay either £200 or £300.

Key points to know:

• The £35,000 limit is based on your individual income, not your household income
• HMRC will usually recover the payment automatically through PAYE
• Self Assessment taxpayers will repay it through their tax return
• Most pensioners do not need to take immediate action
• You can challenge HMRC if the repayment is wrong
• You may be able to opt out of future Winter Fuel Payments

Why is HMRC Recovering Winter Fuel Payments?

The Winter Fuel Payment was previously available to most pensioners to help with rising heating costs. However, the government changed the rules in 2025 so that higher earners still receive the payment automatically but must later repay it through the tax system.

HMRC recover Winter Fuel Payments because the government wants support to remain available while limiting it for pensioners with higher incomes.

Rather than stopping the payment before winter, the government decided to pay it first and then reclaim it if a pensioner’s total income is more than £35,000.

An HMRC spokesperson said:

“We are contacting customers whose tax code has been updated to automatically repay these payments, but they will not need to take any action or call us.”

The recovery is not treated as tax on the Winter Fuel Payment itself. Instead, HMRC adds a separate charge equal to the amount you received.

Importantly, there is no taper. If your income is even slightly above £35,000, you must repay the full amount.

Who Will Have to Repay the Winter Fuel Payment?

You will normally have to repay the Winter Fuel Payment if your individual income for the 2025/26 tax year is more than £35,000 and you received the payment automatically during winter 2025.

HMRC is not looking at whether you live alone or with a partner. Instead, it will examine your own taxable income for the year.

If your income exceeds the threshold, the full Winter Fuel Payment you received will be recovered, even if your partner earns much less or does not have to repay anything.

Pensioners who usually pay tax through PAYE are the main group affected, although those who complete a Self Assessment return will also have to repay the amount through their tax return instead.

What Counts Towards the £35,000 Threshold?

HMRC looks at your total taxable income, not just your State Pension. This can include several sources of income added together.

• • State Pension
  • Private or workplace pensions
  • Earnings from employment
  • Savings interest

• Dividend income
• Taxable benefits

The important point is that the threshold applies to each person separately. If you are part of a couple, one of you could have to repay the Winter Fuel Payment while the other keeps it.

Why Does Household Income Not Matter?

The repayment is based entirely on your own earnings. For example, if you earn £38,000 and your partner earns £20,000, only you would need to repay your share of the Winter Fuel Payment.

Income Scenario	Individual Income	Must Repay?
Single pensioner receiving £34,500	£34,500	No
Single pensioner receiving £36,000	£36,000	Yes
Couple: one earns £38,000, one earns £20,000	£38,000 / £20,000	Only the higher earner repays
Couple: both earn £36,000	£36,000 each	Both repay

whether you repay the Winter Fuel Payment depends entirely on your individual income, not your household situation, so it is important to check your total earnings carefully to understand if the repayment rules apply to you.

How Much Could You Have to Pay Back?

The amount depends on your age and therefore the size of the Winter Fuel Payment you received.

Date of Birth	Winter Fuel Payment to Repay
Between 22 September 1945 and 21 September 1959	£200
Before 22 September 1945	£300

There is no taper system. If your income is even £1 above £35,000, you must repay the entire amount.

How the Monthly Deductions Work?

For most pensioners, HMRC will spread the repayment across the 2026/27 tax year through PAYE. A £200 repayment usually means around £17 a month is deducted from your pension or salary.

If you received £300, the monthly deduction will be closer to £25.

HMRC has also confirmed that deductions may temporarily rise in 2027/28 because two years of Winter Fuel Payments could be collected at the same time.

• Around £17 per month for a £200 payment in 2026/27
• Around £33 per month in 2027/28 if two years overlap
• Deductions should return to normal from 2028/29

A Treasury official said:

“The recovery through PAYE is designed to spread the cost over the year rather than requiring pensioners to make a lump-sum repayment.”

How Will HMRC Recover Winter Fuel Payments Through Your Tax Code?

If you pay tax through PAYE, HMRC will adjust your tax code automatically. Your pension provider or employer will then deduct slightly more tax each month until the full amount has been repaid.

You do not need to send any money directly to HMRC. Instead, you may notice a different tax code on your pension statement or payslip.

What Will the Tax Code Letter Tell You?

HMRC is sending letters, emails and text notifications to around 1.1 million pensioners. The letter should explain:

• That your tax code has changed
• How much of the Winter Fuel Payment is being recovered
• The tax year when the deductions will happen
• That you do not normally need to take any action

Some people may already have received a coding notice earlier in the year without this change. HMRC says an updated version will follow, so there is no need to contact them immediately.

Real-life Example

David, a 72-year-old retired teacher from Manchester, receives £36,800 a year from his State Pension and teachers’ pension. He automatically received a £200 Winter Fuel Payment in winter 2025.

When HMRC updated his tax code in April 2026, his pension payments reduced by around £17 each month.

David said:

“I was confused when the letter arrived because I thought the Winter Fuel Payment was free support. Once I read the notice properly, I realised it was because my income is just over the £35,000 limit.”

What If You Received an Earlier Tax Code Notice?

Some pensioners may already have received a tax code notice that did not mention the Winter Fuel Payment charge. HMRC says you do not need to do anything if this happens. A revised notice will be sent later.

What Happens if You Complete a Self Assessment Tax Return?

If you complete a Self Assessment return, HM Revenue and Customs will not usually recover the Winter Fuel Payment through your tax code. Instead, you must declare it on your 2025/26 tax return.

For online submissions, the amount may already appear as a “Winter Fuel Payment charge” or “Pension Age Winter Heating Payment charge”.

If you file a paper return, you will need to enter the amount manually before the 31 October 2026 deadline.

Key points to remember:

• Include the payment on your Self Assessment return
• Check if the charge is pre-filled (online returns)
• Enter it manually if submitting a paper return
• Review all figures carefully before submission

Most taxpayers will not receive a separate HMRC letter, so it is important to check your return to ensure the repayment amount is accurate.

Can You Challenge HMRC if the Repayment is Wrong?

Yes, you can challenge HMRC if you believe the Winter Fuel Payment repayment is incorrect. Errors can happen, and it is important to act quickly if something does not look right.

Common reasons for disputing a decision include incorrect income figures, being charged the wrong repayment amount, or being included when you should not be.

You may also have grounds to challenge the decision if you receive qualifying benefits such as Pension Credit, as these groups are usually exempt even if income appears above £35,000.

A Department for Work and Pensions spokesperson said:

“We apologise to Mr and Mrs Tingey for the error…” highlighting how mistakes can occur.

If HMRC does not amend the decision, you can request a formal review or seek help from Citizens Advice to ensure the issue is properly resolved.

Can You Opt Out of Future Winter Fuel Payments?

If you know your income will stay above £35,000, you may prefer to opt out of receiving future Winter Fuel Payments.

By opting out, you avoid receiving the payment and therefore do not need to repay it later through your tax code.

You can normally opt out by completing a form on GOV.UK or by calling the Winter Fuel Payment helpline before the September deadline.

The expected deadlines for winter 2026/27 are:

• Online opt-out form by 20 September 2026
• Telephone requests by 18 September 2026

It is important to understand that you cannot simply return the money after you receive it. HMRC has confirmed that once the payment has been issued, the tax charge can still apply.

Are Some Pensioners Exempt From Repaying Winter Fuel Payments?

Yes. Some pensioners will not have to repay the Winter Fuel Payment even if their income is above £35,000.

The main exemption applies to people who receive Pension Credit or certain other qualifying income-related benefits. The government has stated that anyone who qualified under the earlier rules should not lose out under the new system.

You may be exempt if you receive:

• Pension Credit
• Income-related Employment and Support Allowance
• Income Support
• Universal Credit with qualifying circumstances
• Other qualifying means-tested benefits

In these cases, HMRC should receive the necessary information automatically from DWP or Social Security Scotland, meaning no repayment should be added to your tax code or tax return.

Some people may also be excluded from receiving the Winter Fuel Payment entirely. This means they would not receive the payment and therefore would not need to repay it.

This can include:

• People living permanently outside England and Wales
• Individuals who were in hospital for the whole qualifying week
• People who were in prison during the qualifying period
• Individuals whose immigration status prevents them from claiming public funds

If you believe you have been wrongly included in the repayment process despite being exempt, you should contact HMRC as soon as possible.

How Can You Spot Winter Fuel Payment Scams?

Whenever HMRC introduces a new tax change, scammers often use the confusion to target pensioners. Fake texts, emails and phone calls may claim that you need to repay the Winter Fuel Payment immediately or risk a fine.

These messages are designed to look official, but they are not genuine.

Warning Signs of a Fake HMRC Message

Official HMRC messages about Winter Fuel Payments will not ask you to make a payment directly or provide your bank details.

Watch for these warning signs:

• Messages asking you to click a link
• Requests for immediate payment
• Demands for personal or banking information
• Emails or texts that create pressure or urgency

If you receive a suspicious message, forward texts to 60599 or emails to phishing@hmrc.gov.uk.

What Should Pensioners Do Next?

If your income is close to or above £35,000, it is important to review your finances now so you understand whether HMRC will recover winter fuel payments in your case.

Start by adding together all your sources of taxable income for the 2025/26 tax year, including your State Pension, private pensions, savings interest and any earnings from work.

If you think your income may exceed the threshold:

• Look out for a letter, email or text from HMRC
• Review your tax code carefully once it changes
• Check that the correct amount is being recovered
• Make sure any Self Assessment charge is accurate

If you expect your income to remain above £35,000 in future years, opting out of the Winter Fuel Payment before the September deadline may be the simplest way to avoid future repayments.

Conclusion

HMRC’s new system means many pensioners with an income above £35,000 will have to repay their Winter Fuel Payment through tax code changes or Self Assessment.

The key point is that the decision is based on your individual income rather than household earnings.

Most people will not need to take immediate action, but you should check any HMRC letter, review your tax code and make sure the correct amount is being recovered.

If you believe there is a mistake, you can challenge it. Opting out may also be worth considering for future payments.

FAQs

Will every pensioner have to repay the Winter Fuel Payment?

No. Only pensioners with individual income above £35,000 normally have to repay it.

Is the £35,000 limit based on household income?

No. HMRC looks at your personal income only.

Can I repay the Winter Fuel Payment early?

No. HMRC says repayment must happen through your tax code or Self Assessment.

What if I receive Pension Credit?

People receiving Pension Credit are generally exempt from repaying the Winter Fuel Payment.

Will HMRC contact me by text?

HMRC may send a text or email telling you to check GOV.UK, but it will not ask for payment details.

What happens in Scotland?

Scottish pensioners receive the Pension Age Winter Heating Payment, but the same £35,000 repayment rules apply.

Can I challenge an incorrect repayment?

Yes. You can contact HMRC and request a review if you think the decision is wrong.