HMRC to start clawing back Winter Fuel Payments from certain pensioners – do you owe the taxman money?

HMRC will start clawing back Winter Fuel Payments from hundreds of thousands of pensioners this month.

More than one million pensioners are being contacted by email or letter in April 2026, informing them of changes to their tax code if they received a Winter Fuel Payment last winter and their annual total income was over £35,000.

Around 2.2 million pensioners, including 1.3 million on PAYE, are expected to have to pay back their Winter Fuel Payment from 2025/26, according to government figures.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

Those on PAYE are having their tax codes amended to claw back the payment, which is worth £200 a year or £300 for some pensioner households, over the 2026/27 financial year.

Someone who received a £200 Winter Fuel Payment will be taxed around £17 extra per month.

The remaining 900,000 pensioners affected will have to repay the payment through their self-assessment tax return.

The payment should be added to their 2025/26 tax return due by 31 January 2027. Paper filers will need to add it to their return by 31 October 2026.

How to work out if your Winter Fuel Payment will be taken back

In 2025, the government rowed back on its controversial decision to means-test the Winter Fuel Payment.

Chancellor Rachel Reeves announced the strict rules would be eased so pensioners earning £35,000 or less per year would be able to get the payment. HMRC will recover the payment from those earning more than this threshold.

Your total income will be considered, before any deductions, also known as gross income.

If there’s more than one person in the household, each person’s income will be looked at on an individual basis. So, if your income was £36,000 and your partner’s was £22,000, you’ll lose your Winter Fuel Payment but they will keep their payment.

What’s classed as your total income includes income from a private pension and even interest on savings – so utilising tax-free savings vehicles like a cash ISA could be more important than ever.

Income from the state pension, a trust or dividends from company shares are also considered.

The government has a tool you can use to find out if your income has breached the £35,000 threshold.

Pensioners urged to watch out for Winter Fuel Payment scams

As HMRC starts clawing back Winter Fuel Payments, it is urging pensioners to be wary of scammers trying to steal money.

HMRC will not contact people by text or email asking them to repay their Winter Fuel Payment or to request bank details.

Myrtle Lloyd, chief customer officer at HMRC, said scammers could use fake letters, emails, calls and texts asking for payments.

Can I opt out of getting the Winter Fuel Payment?

You can opt out of getting the Winter Fuel Payment for 2026/27 if you don’t want it to be reclaimed through your tax code in the future.

To do so, you need to complete an opt out form before 11.59pm on September 20 2026, or call the Winter Fuel Payment Centre helpline on 0800 731 0160 before 6pm on 18 September.

If you change your mind, or your circumstances change, you can opt back in by contacting them again. To get the payment for 2026/27 you will need to contact the Winter Fuel Payment Centre before 31 March 2027.

You can’t get a Winter Fuel Payment if you live in Scotland but you might qualify for the Pension Age Winter Heating payment.