HMRC is contacting state pensioners whose total income exceeded £35,000 after they received the Winter Fuel Payment from the Department for Work and Pensions (DWP). The payments, which range from £100 to £300, must be repaid if the recipient's income surpasses the eligibility threshold.
How Repayments Will Be Collected
Most repayments will be handled automatically through adjustments to tax codes in the 2026 to 2027 tax year. Households that anticipate exceeding the income limit can opt out of future Winter Fuel Payments starting from 1 April 2026.
BBC personal finance expert Rebecca Wilcox appeared on BBC Morning Live to explain the repayment process and warn about potential scams. She stated: "In most cases, the money will be recovered automatically through the tax system. HMRC will adjust the person's tax code in the 2026 to 2027 tax year. The repayment appears as an underpayment, meaning slightly higher tax deductions will be taken each month."
No interest is charged on the amount being repaid. For example, someone who received £200 could see their monthly income reduced by around £17 while the repayment is collected. However, the change in tax code means state pensioners will pay back approximately £33 a month if they have been in receipt of the benefit.
Self Assessment and Challenges
Individuals who complete a Self Assessment tax return will instead see the repayment added to their tax bill for the 2025 to 2026 tax year. Anyone who believes the calculation is incorrect can challenge the decision with HMRC.
Scam Warning
Ms Wilcox also confirmed that scams are circulating. She said: "Fraudsters often send messages pretending to be from government departments asking for personal details or payment." HMRC has confirmed that official letters about Winter Fuel Payment repayments will clearly state that no action is required and will not ask for personal or financial information. If you receive any message requesting details or payment in relation to the Winter Fuel Payment, dispose of it immediately.
