HMRC will send out new tax codes to get the money (Image: Getty)
State pensioners who need to repay their winter fuel payment from April will be made to pay £33 a month extra in tax by HMRC.
HM Treasury has issued a guide on the gov.uk website which explains the new system of collecting payments from the state pensioners lucky enough to be earning above the £35,000 threshold.
Previously, the winter fuel payment was sent to everyone universally. Then, in 2024 the government changed the rules so that you needed to be eligible for Pension Credit in order to get the money, limiting it to those earning about £11,300 a year or less. Massively unpopular, this lasted just one winter before the system we have now was brought in.
Under this system, the money is paid to all pensioners as before, but the cash is reclaimed by HMRC from those who earn £35,000 or more in a given tax year, which is an estimated two million state pensioners.
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HMRC’s guidance explains that, unless you opt out of receiving the payment, which you may choose to do if you know you’ll exceed the threshold and you don’t want the hassle of giving it back, then it will change your tax code.
For this current winter fuel payment, paid November 2025 to January 2026, your tax code will be changed from April, which will mean you repay about £17 a month.
For those who go on to receive payments again in the following tax year (i.e. those who didn’t opt out) their tax code will change to collect the winter fuel payment for both tax years, worth £33 a month.
HMRC’s guidance says: “We’ll take your payment for the 2025 to 2026 tax year by changing your tax code for the 2026 to 2027 tax year. This means you’ll pay more tax each month to pay back the full payment that you received in the 2025 to 2026 tax year.
“For example, for a typical payment of £200, you’ll pay approximately £17 per month extra in tax.
“In April 2026, you’ll get a letter or an email notification to tell you that we’ve changed your tax code to take back your Winter Fuel Payment. This will show as an underpayment. Any tax code letter or notification before this will not include this change.”It adds: “If you receive payments in the 2026 to 2027 and 2027 to 2028 tax years.
“Unless you opt out of receiving the payment, we’ll collect your payments for the 2 tax years by changing your tax code for the 2027 to 2028 tax year.
“For example, if you receive a payment in each tax year of £200, we’ll deduct approximately £33 per month extra in tax in the 2027 to 2028 tax year.”
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.”
