Some pensioners may have to pay back their Winter Fuel Payment – are you affected?

Over the next few weeks, HMRC will contact around 1.3 million pensioners by letter, text, or email to tell them their tax code is changing. 

The move is designed to recover Winter Fuel Payments worth up to £300 that were sent to pensioners in England, Wales and Northern Ireland last winter, but must now be repaid by some higher earners.  

Under current rules, if your total income is above £35,000, you’ll still receive the payment but will have to repay it through the tax system. This means if you earned above this limit and received the payment, the money will be collected through extra tax over the coming tax year. 

Here, Which? explains who will be contacted, how the money will be collected, and how you can opt out in future if you don’t want to repay it. 

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Who will be contacted by HMRC?

The Winter Fuel Payment is an annual payment made to those over the state pension age to help with the costs of heating over the winter months. You can be eligible for payments worth between £100 and £300, depending on your personal circumstances. 

Previously, all pensioners over age 66 received the payment. In July 2024, the rules changed to limit the payment only to those on pension credit. Following a backlash, the government changed the rules again for 2025-26. 

Because the payment was issued automatically, the government is now using the tax system to recover the money from higher earners. This is done through your tax code, which tells your pension provider or employer how much tax to deduct before paying your income. HMRC will adjust your tax code to collect the payment.

HMRC will contact you if: you received a Winter Fuel Payment in winter 2025, your individual income is over £35,000 a year, and you do not usually complete a self-assessment tax return. 

It’s important to note that some people may have received a tax code notice earlier this year that did not include this change. If that applies to you, HMRC says you do not need to take any action and will receive an updated tax code.

• Find out more: Cold Weather Payment, Winter Fuel Payment and Fuel Direct

How will the Winter Fuel Payment be repaid?

In most cases, you do not need to do anything. HMRC will automatically update your tax code and your pension provider or employer will adjust the amount of tax you pay. 

For those who received a £200 Winter Fuel Payment, HMRC says this will typically mean paying back around £17 a month over the 2026 to 2027 tax year.

In the following tax year, 2027 to 2028, deductions may temporarily increase to around £33 a month. This is because HMRC may be collecting payments for two winters at the same time.

This is the first year the government is using the tax system to recover Winter Fuel Payments from higher earners.

• Find out more: more pensioners to get the Winter Fuel Payment

What if I file a self-assessment tax return?

If you are registered for self-assessment, then you will not receive communication from HMRC about a changing tax code. Instead, the payment will automatically be included on your tax return for 2025-26 and will be recovered through it. 

The Civil Service Pensioners Alliance says for online filers, the payment will be labelled as: ‘Winter Fuel Payment charge' or 'Pension Age Winter Heating Payment charge’. 

If the charge is missing, you will need to add it. Anyone who believes the calculation is incorrect can challenge the decision with HMRC.

If you file a paper return, you will need to include the correct amount yourself before the deadline of 31 October 2026.

• Find out more: how to fill in a self-assessment tax return

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How to opt out of next year’s payment

If you know your income for the 2026-27 tax year will stay above the £35,000 threshold, you can choose to opt out of receiving the Winter Fuel Payment next winter.

Opting out means you will not need to repay the money through your tax code later.

You can opt out of getting this year's payment from April 2026, and you'll either need to: 

• complete the opt out form before 11:59pm on 20 September 2026
• call the helpline before 6pm on 18 September 2026

You can find the opt out form on Gov.uk or you can call the helpline on 0800 731 0160.

• Find out more: how to get support if you miss out on the Winter Fuel Payment 

What about Scotland?

In Scotland, the equivalent of the Winter Fuel Payment is the Pension Age Winter Heating Payment. It’s managed by Social Security Scotland and has the same eligibility criteria.

Scottish recipients received between £101.70 and £305.10 for winter 2025 to 2026. This is set to rise to between £105.55 and £316.70 for winter 2026 to 2027.

The same income rules apply in Scotland. If your income is over £35,000, HMRC will reclaim the payment in the same way.

For winter 2025 to 2026, Social Security Scotland accepted opt-outs from people who had previously told the Department for Work and Pensions they did not want the payment. You could also opt out by contacting Social Security Scotland directly.

Details of how to opt out for winter 2026 to 2027 are expected in the coming months