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Around two million older people are expected to be affected
Millions of pensioners are facing a tax blow as HMRC starts writing to retirees who must repay their Winter Fuel Payment. Approximately two million elderly people are expected to be affected by the clawback after receiving the annual heating support automatically – only to discover they must now return it.
The majority of retirees receive the Winter Fuel Payment without needing to make an application. However, according to the regulations, anyone earning more than £35,000 from employment, a private pension or savings interest is required to repay it entirely.
HMRC is now contacting those impacted to inform them their tax code will be altered so the funds can be recovered.
Who must repay – and how much?
The sum pensioners must return 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 numerous people, the repayment will be distributed throughout the year via PAYE – the mechanism that removes tax from wages and pensions. In reality, this means a revised tax code for the 2026/27 tax year.
If you received a £200 payment, approximately £17 per month will usually be deducted from your income over the year.
How the clawback operates
The majority of pensioners will repay automatically through an amended tax code. Those who submit a Self Assessment tax return will have the sum added to their bill instead.
Online Self Assessment returns for the 2025/26 tax year must be submitted by January 31, 2027. Paper returns must be filed by October 31, 2026 If you’re already registered for Self Assessment, the Winter Fuel Payment repayment will be recovered 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 traditionally been regarded as a universal safety net to help elderly households manage escalating energy costs.
However, the £35,000 income threshold means wealthier pensioners are now being required to repay the support – even if it was issued automatically. For some, the first indication of an issue will be correspondence from HMRC and an adjustment to their tax code.
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