HM Revenue and Customs (HMRC) has confirmed state pensioners earning more than £35,000 annually will face additional monthly tax deductions to recover Winter Fuel Payments issued during the 2025/26 financial year.
The recovery programme began in April 2026 and is expected to affect almost two million households across the UK.
Winter Fuel Payments worth between £100 and £300 were distributed to pensioner households before later income assessments determined some recipients exceeded the earnings threshold.
HMRC said the money will now be reclaimed automatically through adjusted tax codes during the 2026/27 tax year.
Affected pensioners are expected to pay around £17 extra per month in tax until the full amount has been recovered.
The tax authority said pensioners impacted by the changes should already have received correspondence explaining updates to their tax code.
HMRC outlined the repayment process for basic rate taxpayers and explained how the deductions would operate throughout the financial year.
The department said: "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."
HMRC Winter Fuel Payment clawback explained as pensioners face extra monthly tax deductions
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Pensioners cannot choose to repay the money more quickly through the standard process and must wait for HMRC to recover the funds through PAYE adjustments.
The clawback only applies to pensioners whose income exceeded the threshold and who did not opt out of receiving the Winter Fuel Payment when it was offered.
Those affected will see their tax-free allowance reduced to reflect both their state pension income and the amount being reclaimed.
The recovery arrangements apply across the whole of the United Kingdom.
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Labour has received backlash over its past attempt to means-test Winter Fuel Payments | PAIn Scotland, the payment is known as the Pension Age Winter Heating Payment, while in Northern Ireland the Department for Work and Pensions issued payments on behalf of the Northern Ireland Executive.
HMRC is responsible for administering all recovery activity regardless of where recipients live within the UK.
Pensioners who complete Self Assessment tax returns online will find the Winter Fuel Payment automatically included within their 2025/26 return.
The deadline for online submissions is January 31, 2027.
HMRC said individuals should check the payment has been correctly recorded and manually add it if it does not appear.
Those submitting paper tax returns face an earlier deadline of October 31, 2026.
The tax authority has also issued warnings about potential scams linked to the repayment process.
HMRC said fraudsters may attempt to exploit confusion surrounding the clawback scheme by impersonating officials through text messages, emails or phone calls.
The department stressed it would never contact pensioners by text or email requesting direct repayment or asking for banking information.
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."
HMRC has advised pensioners concerned about any communication they receive to verify information through official Government channels rather than responding directly to unsolicited messages or calls.
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