Millions of pensioners should repay Winter Fuel Payments to HMRC
Around two million older people are expected to be caught
Around two million older people are expected to be caught by the clawback(Image: stockphotodirectors via Getty Images)
Millions of pensioners are being hit with a tax sting as HMRC begins writing to retirees who must repay their Winter Fuel Payment.
Around two million older people are expected to be caught by the clawback after receiving the annual heating boost automatically – only to be told they now have to hand it back. Most retirees get the Winter Fuel Payment without having to apply. But under the rules, anyone with income above £35,000 from work, a private pension or savings interest must repay it in full.
Now HMRC is contacting those affected to warn them their tax code will be changed so the money can be recovered.
Who has to repay – and how much?
The amount pensioners must hand back depends on their age:
- Born between September 22, 1945 and September 21, 1959 – must repay £200
- Born before September 22, 1945 – must repay £300
For many, the repayment will be spread over the year through PAYE – the system that deducts tax from wages and pensions. In practice, that means an updated tax code for the 2026/27 tax year.
If you received a £200 payment, around £17 a month will typically be deducted from your income across the year.
How the clawback works
Most pensioners will repay automatically via an adjusted tax code. Those who complete a Self Assessment tax return will have the amount added to their bill instead.
Online Self Assessment returns for the 2025/26 tax year must be filed by January 31, 2027. Paper returns must be submitted by October 31, 2026. If you are already in Self Assessment, the Winter Fuel Payment repayment will be collected 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.”
Why this matters
The Winter Fuel Payment has long been seen as a universal lifeline to help older households cope with soaring energy bills.
But the £35,000 income threshold means better-off pensioners are now being forced to repay the support – even if it was paid automatically. For some, the first sign of trouble will be a letter from HMRC and a change to their tax code.
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