Millions of pensioners being hit with £300 bills by HMRC this winter – check if you’re affected

Retirees with annual incomes over £35,000 will be liable for repayment of their winter assistance.

Under the government’s strategy, pensioners will receive between £200 and £300 in heating support this November, only to have it reclaimed later.

Tax authorities have confirmed the recovery process will operate through payroll systems rather than direct bank withdrawals.

The change affects thousands of middle-income retirees who believed they would keep their payments.

The HM Revenue and Customs (HMRC) will recover the money through the Pay As You Earn (PAYE) framework.

Modest monthly deductions will begin in April 2026 and continue until April 2027.

Those completing self-assessment tax returns will see the repayment incorporated into their 2025–26 tax bill, payable by January 2027.

Paper filers will face an October 2026 deadline.

Dan Whitworth, financial journalist at BBC Radio 4’s Money Box, said: "That money will not be taken from bank accounts. Instead, HMRC will reclaim it through tax."

The £35,000 threshold includes all income streams such as private pensions and state benefits.

Recipients who did not opt out before the September deadline will receive letters confirming changes to their tax codes.

In 2027, the government will introduce a dual collection system.

Pensioners could face deductions totalling £600 that year, covering both the 2026 repayment and an advance collection for 2027’s winter support.

Mr Whitworth explained: "The government says this approach helps avoid delays in recouping overpayments and ensures the system stays up to date."

The double deduction could have a significant financial impact, with monthly deductions reaching around £50 depending on payment size and collection period.

An HMRC spokesperson said: "The vast 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."

HMRC has set up digital tools to support affected pensioners.

The spokesperson added: "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."

The Treasury says this approach streamlines the process and avoids delays in reclaiming overpayments.

Pensioners expecting income above the threshold can avoid future clawbacks by declining the 2026 payment when applications open on 1 April 2026.

The opt-out will be available through GOV.UK or mygov.scot using basic personal details.

Despite the change, about 7.4 million pensioners will continue receiving their winter heating support under the revised rules.

This follows Labour Party’s partial reversal of an earlier plan to limit payments to pension credit claimants.

The original proposal sparked widespread public opposition.

It would have saved the Treasury £1.4billion but affected around 10 million elderly citizens.

The revised plan reflects public pressure but still leaves millions of moderate-income retirees subject to repayment through the tax system.