TL;DR
HMRC is recovering Winter Fuel Payments from around two million pensioners whose annual income exceeds £35,000. From April 2026, tax codes have been adjusted to collect repayments monthly through PAYE. Self-assessment filers include the amount in their 2025/26 return. No action is needed - but understanding your tax code notice is important.
Last reviewed: June 2026
Key Facts
- Around 2 million pensioner households are affected by the recovery programme.
- The income threshold is £35,000 - this includes state pension, private pension income and other earnings.
- A typical £200 payment is recovered at roughly £17 per month extra in tax during 2026/27.
- Recovery is automatic via PAYE tax code adjustment - pensioners do not need to send money directly.
- Self-assessment filers: add the Winter Fuel Payment to your 2025/26 return (due 31 Jan 2027 online; 31 Oct 2026 paper).
- HMRC warns of scam texts and emails pretending to request direct repayment - HMRC will never contact you this way.
What is the Winter Fuel Payment clawback?
The Winter Fuel Payment is an annual benefit paid to pensioner households to help with heating costs. From the 2025/26 tax year, the government introduced an income-based assessment: households where the highest earner has income over £35,000 must repay the payment. Rather than refusing the benefit upfront or taking money directly from bank accounts, HMRC is collecting the debt through the tax system.
The recovery programme began in April 2026 and is expected to affect close to two million households across the UK. Payments of between £200 and £300 were distributed to qualifying pensioner households before later income assessments determined some recipients exceeded the threshold.
Who is affected?
A household is affected if the individual who received the Winter Fuel Payment has total taxable income above £35,000 for 2025/26. This income figure is not limited to employment - it includes state pension, private pension income, rental income, dividends and other taxable receipts. A spouse or partner's income is not included in the calculation.
Pensioners who did not opt out before HMRC's September 2025 deadline will receive a letter or email notification confirming their tax code has been adjusted. The underpayment entry will appear in their online tax account. HMRC says it will verify the actual 2025/26 income figure once the tax year closes and adjust accordingly - if a pensioner turns out not to owe the repayment after all, their tax code will be updated and any over-collected amounts refunded.
How does the recovery work through PAYE?
For pensioners receiving income through PAYE (typically those with an occupational pension), HMRC reduces the tax-free personal allowance in the tax code. This means a slightly higher amount of tax is deducted each month automatically by the pension provider or employer. The deduction continues until the full amount has been recovered during the 2026/27 tax year.
For a £200 Winter Fuel Payment, the monthly extra deduction is approximately £17 for a basic rate taxpayer. For a £300 payment, the deduction is proportionally higher. There is currently no option to make a voluntary lump-sum repayment ahead of schedule.
Self-assessment customers
Pensioners already registered for self-assessment do not go through the PAYE route. Instead, HMRC will include the Winter Fuel Payment in the 2025/26 tax return automatically. Filers should check their online return to confirm the amount is included. If it is missing, it should be added manually in the income section.
The deadline for online returns covering 2025/26 is 31 January 2027. Paper filers face an earlier deadline of 31 October 2026. Missing the deadline triggers an automatic £100 penalty plus interest on unpaid tax.
From 2027: the dual-collection year
The system changes again from April 2027. HMRC has signalled that the 2027/28 tax year will see a dual recovery: one collection to cover any outstanding 2026/27 amount, and a second advance collection for the 2027/28 payment. Pensioners above the threshold will therefore see higher-than-usual deductions during that year.
Scam warning
HMRC has issued a direct warning that fraudsters are targeting pensioners with fake messages about the clawback scheme. Scam texts and emails claim HMRC needs bank details or direct payment to resolve the debt. HMRC states clearly it will never contact pensioners by text or email to request direct repayment or ask for banking information. Any such message should be reported to HMRC's phishing reporting service and deleted.
What to check if you receive a tax code notice
When a tax code notification arrives (online or by post), check that the underpayment figure matches the Winter Fuel Payment received. If the figure appears incorrect - for example if income was below £35,000 for 2025/26 - contact HMRC using the online Personal Tax Account at gov.uk or by calling the income tax helpline on 0300 200 3300. Do not ignore the notice as unresolved codes carry forward.
What if you think your income is below the threshold?
The £35,000 threshold applies to your total taxable income for 2025/26, not just pension or salary. If you believe your income for that year was below the threshold, you should not simply ignore letters from HMRC adjusting your tax code. The correct route is to contact HMRC using your Personal Tax Account at gov.uk/personal-tax-account or by calling 0300 200 3300. Provide details of your income sources and HMRC can update the code. Waiting until the end of the tax year risks having paid too much tax unnecessarily throughout 2026/27.
Couples and joint households
The Winter Fuel Payment is assessed individually, not jointly. If both members of a couple received the payment, each is assessed separately against the £35,000 individual income threshold. A household where one partner earns £50,000 and the other earns £20,000 would see only the higher earner required to repay - the lower earner keeps the payment if their income is below the threshold. This individual assessment is important because many pensioner couples assumed the household income would be combined in the assessment, which is not the case.
What pensioners on low incomes should know
Pensioners with income below £35,000 are not required to repay the Winter Fuel Payment and will not receive an adjusted tax code for this purpose. However, some lower-income pensioners have reported receiving incorrect letters or code changes. If you have received a notice but believe your income is below the threshold, contact HMRC immediately to correct the record before any deductions begin. Citizens Advice and Tax Aid both provide free help to pensioners who need to challenge incorrect HMRC codes.
State pension and the threshold calculation
The full new state pension for 2025/26 was £11,973 per year. For many pensioners, the state pension alone is well below the £35,000 threshold. However, when combined with a defined benefit occupational pension, defined contribution drawdown income, rental income or investment returns, the total can exceed £35,000 more easily than pensioners might expect. HMRC's online Personal Tax Account allows individuals to check their estimated income figure and see whether a Winter Fuel Payment recovery is expected before the adjustment reaches their pension provider.
Timeline of key dates
April 2026: HMRC begins adjusting tax codes for affected pensioners. Letters and online notifications issued. Monthly PAYE deductions start. October 2026: Deadline for paper self-assessment returns covering 2025/26. January 2027: Deadline for online self-assessment returns covering 2025/26. April 2027 onwards: Dual-year recovery cycle begins for those above threshold in 2026/27.
Pension credit and the Winter Fuel Payment
Pensioners who receive Pension Credit are in a separate position from those subject to the income-based clawback. Pension Credit recipients were the group specifically retained as eligible for the Winter Fuel Payment when the government restricted eligibility from the 2024/25 tax year onwards. The Winter Fuel Payment for Pension Credit recipients is not subject to the clawback regime because their income is, by definition, below the means-test threshold that qualifies them for Pension Credit in the first place. If you receive Pension Credit and have received a tax code adjustment notice relating to a Winter Fuel Payment, this may be an error - contact HMRC and the Pension Service to resolve it.
How to use the HMRC online Personal Tax Account
HMRC's Personal Tax Account at gov.uk/personal-tax-account provides access to your current tax code, estimated income figure, National Insurance record and any underpayment notices. To access it you need a Government Gateway login - if you do not have one, it can be created online with a passport or driving licence for identity verification. Once logged in, the Tax Account will show any adjustment to your tax code for the Winter Fuel Payment recovery and allow you to check the estimated income HMRC is using. If the figure is wrong - for example because it includes income that has since stopped - this is the place to flag the discrepancy. The account is available 24 hours a day and is the fastest route to checking and challenging any code changes without waiting on the phone.
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Frequently Asked Questions
Do I need to contact HMRC to repay the Winter Fuel Payment?
No. If you are a PAYE customer, HMRC adjusts your tax code automatically and deductions are made monthly. Self-assessment customers include the amount in their tax return. There is no option to make a direct lump-sum payment.
What counts as income for the £35,000 threshold?
All taxable income counts: state pension, private or occupational pension, employment income, rental income, dividends and savings interest above the personal savings allowance. A partner or spouse's income is not included.
What if my 2025/26 income was actually below £35,000?
HMRC will reconcile the actual figure once the tax year closes. If you do not owe a repayment, the code will be corrected and any over-collected tax refunded through your pension provider or via a tax repayment cheque.
What if I get a text or email asking me to repay directly?
This is a scam. HMRC does not contact taxpayers by text or email to request direct repayment or banking information. Forward the message to phishing@hmrc.gov.uk and delete it. Do not click any links.
Can I opt out of receiving the Winter Fuel Payment in future?
Yes. HMRC provides an opt-out process for pensioners above the threshold who do not want to receive the payment and later repay it. The opt-out deadline for the 2026/27 payment cycle was September 2026 - check gov.uk for the current cycle deadline.
