HMRC has begun recovering Winter Fuel Payments from some pensioners who received the support and have income above £35,000. The process is being handled through PAYE tax codes for many pensioners, while others who complete Self Assessment are seeing the payment added to their tax return.
The recovery applies to the 2025 to 2026 tax year and is taking place during the 2026 to 2027 tax year. HMRC says that for a typical Winter Fuel Payment of £200, PAYE customers with income above the threshold will pay around £17 more each month until the payment has been recovered.
How the recovery works
HMRC says the payment is being taken back through a change in pensioners’ PAYE tax code from April 2026. For those in Self Assessment who file online, the Winter Fuel Payment should be pre-populated in the 2025 to 2026 return, due by 31 January 2027. Paper returns need to include it by 31 October 2026.
The recovery system applies across the UK, including Scotland, where the payment is known as the Pension Age Winter Heating Payment, and Northern Ireland, where the DWP made payments on behalf of the Northern Ireland Executive. HMRC says recovery is still handled centrally.
Who is affected
The recovery only applies to pensioners with annual income above £35,000 who did not opt out of receiving the payment last year. One article on the issue said richer state pensioners could miss out on the £300 Winter Fuel Payment if the sums are clawed back through self-assessment tax returns.
That same report said the government is considering wider eligibility for the payment while keeping some form of means test in place. It also quoted a warning that increasing eligibility while clawing money back from higher-income households could create a system similar to the one used for child benefit recovery.
Warnings over scams
HMRC has warned pensioners to be alert to scams as the recovery process gets under way. It advised people to report suspicious texts, emails or phone calls and said anyone who has lost money should contact their bank straight away and notify Report Fraud.
The issue has drawn wider attention because of the number of pensioners affected and the changes to the tax system. For those caught by the clawback, the adjustment is being made automatically rather than through a separate repayment request.
What pensioners should check
Those who receive a tax code notice are being told to check that it reflects the recovery correctly. Pensioners using Self Assessment are expected to confirm that the Winter Fuel Payment appears on their return, and add it manually if it does not.
The recovery marks a notable shift in how the support is handled for higher-income pensioners. Instead of keeping the Winter Fuel Payment in full, HMRC is using the tax system to collect it back over time from those above the threshold.
