HM Revenue and Customs (HMRC) has confirmed that state pensioners with an annual income exceeding £35,000 will face an additional tax charge of around £33 per month to recover Winter Fuel Payments received in the 2026/27 and 2027/28 tax years. The recovery is automatic via a tax code change unless pensioners opt out of receiving the payment.
How the Recovery Works
Winter Fuel Payments, valued between £100 and £300 per month with a typical payment of £200, are being clawed back from higher-income pensioners. HMRC adjusts the tax code for the 2027/28 tax year to collect payments for both 2026/27 and 2027/28. For a £200 payment each year, this results in an extra £33 per month in tax. For the 2026/27 tax year alone, the extra tax is about £17 per month.
HMRC stated: "If you receive payments in the 2026 to 2027 and 2027 to 2028 tax years: Unless you opt out of receiving the payment, we’ll collect your payments for the 2 tax years by changing your tax code for the 2027 to 2028 tax year. For example, if you receive a payment in each tax year of £200, we’ll deduct about £33 per month extra in tax in the 2027 to 2028 tax year."
Current and Future Tax Years
Recovery for the 2025/26 tax year is already underway. HMRC sent letters or email notifications in April confirming tax code changes. Pensioners who file Self Assessment online will see the payment pre-populated in their 2025/26 tax return, due by January 31, 2027. Paper filers must add it manually by October 31, 2026. For payments from 2028/29 onwards, recovery will occur in the year the payment is received via a tax code adjustment.
Opting Out and Scam Warnings
Pensioners can avoid the extra tax by opting out of Winter Fuel Payments. The opt-out form must be submitted by 11:59 pm on September 20, 2026, or the helpline called by 6 pm on September 18, 2026. The recovery applies UK-wide, including Scotland (where it is called Pension Age Winter Heating Payment) and Northern Ireland (administered by DWP on behalf of the Northern Ireland Executive). HMRC handles all recoveries.
HMRC warns pensioners to be vigilant against scams. 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.”
Only pensioners exceeding the £35,000 income threshold who did not opt out are affected by the recovery.
