HMRC sending out letters to millions of pensioners who must repay their Winter Fuel Payment

HM Revenue and Customs has begun reaching out to roughly 1.1 million pensioners this month regarding modifications to their tax codes that will reclaim Winter Fuel Payments.

The tax authority is sending letters and email notifications to retirees whose annual income exceeds £35,000, informing them that money will be recovered through adjustments to their 2026/27 tax codes.

Those affected received the heating support payment automatically last year but must now return it due to their income level.

The clawback applies to individual earnings rather than household income, meaning couples will be assessed separately.

HMRC will examine each person's total income from sources including state and private pensions, employment, savings interest, dividends and taxable benefits to determine whether repayment is required. The sum pensioners must repay depends on their date of birth.

Individuals born between 22 September 1945 and 21 September 1959 will need to hand back £200, while those born before 22 September 1945 face returning £300.

For most affected pensioners, the repayment will be spread across the entire 2026/27 tax year through the PAYE system. This means approximately £17 extra will be deducted from their monthly income for a typical £200 payment.

Scottish taxpayers may see slightly different deduction amounts due to variations in Scottish tax rates.

The payment was designed to assist with heating costs and was deposited directly into recipients' bank accounts, worth up to £300 depending on age.

HMRC will recover the 2025/26 Winter Fuel Payment by altering tax codes for the following financial year, resulting in higher monthly tax deductions until the full amount is repaid.

Pensioners cannot choose to repay the money earlier and must wait for the tax authority to process the recovery.

Once HMRC confirms an individual's income for the 2025/26 tax year, it will verify whether repayment remains necessary. For those who complete Self Assessment returns, the process differs.

The payment must be included on tax returns from the 2025/26 tax year onwards, with online filers likely to see the amount automatically added as a charge labelled "winter fuel payment charge".

Paper return filers must manually add the payment to their 2025/26 submission, which is due by 31 October 2026.

The rules governing Winter Fuel Payments were altered in 2024, restricting eligibility to those receiving certain benefits. This change prompted significant public backlash.

Pensioners with taxable income above £35,000 continued to receive payments unless they actively opted out before the 15 September 2025 deadline.

Those who missed this cutoff were informed that HMRC would recover the money through tax code adjustments from April 2026 or add it to their Self Assessment bill.

An HMRC spokesperson said: "We are contacting customers whose tax code has been updated to automatically repay these payments, but they won't need to take any action or call us."

Pensioners who believe they are being incorrectly charged can dispute the repayment directly with HMRC.

However, certain groups remain ineligible regardless of age, including those living outside England and Wales, people who were hospitalised for the entire qualifying week of 15-21 September 2025 and the preceding year, individuals whose immigration status prohibits claiming public funds, and those who spent the full qualifying week in prison.

Pensioners who believe they have been incorrectly charged can dispute the repayment directly with HMRC.

The tax authority has confirmed that affected individuals do not need to telephone or take any immediate action following receipt of their notification letter.