HMRC warns pensioners set to face extra £17 monthly tax bill

State pensioners earning more than £35,000 a year will see their monthly tax bills rise by around £17 as HM Revenue and Customs (HMRC) begins reclaiming Winter Fuel Payments made during the 2025-26 tax year.

The additional charges are intended to recover Winter Fuel Payments worth between £100 and £300 that were issued to households whose annual income exceeded the £35,000 threshold.

Almost two million pensioner households across the UK are expected to be affected by the recovery process.

HMRC said Winter Fuel Payments will be recouped through increased monthly tax deductions until the full amount has been repaid.

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HMRC stated: "For a typical Winter Fuel Payment of £200, PAYE customers with income more than £35,000 will pay approximately £17 per month extra in tax during the 2026 to 2027 tax year to recover their payment."

For pensioners paying tax through PAYE, the recovery process is taking place automatically through adjustments to tax codes for the 2026-27 financial year.

Affected households should already have received correspondence from HMRC confirming changes to their tax code.

The higher deductions began in April 2026 and will continue each month until the entire Winter Fuel Payment has been recovered.

Pensioners cannot repay the amount early and must wait for HMRC to collect the money through their amended tax code.

Those who complete Self Assessment tax returns online should find their Winter Fuel Payment pre-populated within their 2025-26 return, which must be submitted by January 31, 2027.

Taxpayers filing online are advised to check that the payment has been included and add it manually if it is missing.

People submitting paper returns face an earlier deadline of October 31, 2026.

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In an example provided by the tax authority, a pensioner with a total income of £37,710, made up of £25,737 from a private pension and £11,973 from the state pension, who received a £200 Winter Fuel Payment in December, would have their tax-free allowance reduced.

The calculation deducts the state pension amount and an additional £1,000 from the Personal Allowance of £12,570, leaving £403 of tax-free income available.

This produces a K39 tax code, meaning the pensioner pays additional tax on £399 of income.

The recovery arrangements apply across the UK, including in Scotland where the benefit is known as the Pension Age Winter Heating Payment, and in Northern Ireland where payments were administered by the Department for Work and Pensions on behalf of the Executive.

HMRC has also warned pensioners to remain vigilant against scams linked to the repayment process.

The tax authority said it will never send text messages or emails requesting repayment of Winter Fuel Payments or asking people to provide bank account details.

Myrtle Lloyd, HMRC's chief customer officer, said: "Criminals are great pretenders and often use fake letters, emails, calls and texts to impersonate HMRC and trick people into giving them money.

"I'd encourage anyone who's unsure to use our online tool at GOV.UK to check whether and how their payment will be recovered; there's no need to call us."

The repayment scheme only affects pensioners whose income exceeded £35,000 during the relevant tax year and who did not opt out of receiving the Winter Fuel Payment.

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