HMRC has confirmed that state pensioners born after 1951 who earn £22,453 from other sources will be pulled over the £35,000 income threshold, triggering a clawback of the Winter Fuel Payment. The payment, worth up to £200 for those aged 80 and over, is being recovered through adjustments to tax codes for the 2026/27 tax year.
Who Is Affected by the Clawback?
The new state pension, which applies to men born after 1951 and women after 1953, is worth £12,457 per year. Pensioners receiving this full amount who also have £22,453 in other taxable income—such as private pensions, employment earnings, or non-ISA savings interest—will exceed the £35,000 threshold. HMRC will then recover the Winter Fuel Payment as additional tax.
Money Saving Expert, founded by Martin Lewis, explained: 'If your annual income is above the £35,000 threshold, you'll repay the Winter Fuel Payment as extra tax alongside your normal Income Tax payments over the coming 2026/27 tax year. This will be done through a change in your tax code for 2026/27 – it's this change that HMRC is contacting people about. Your tax code is what tells your private pension provider or employer how much tax to deduct before paying your income into your bank account.'
How the Means Test Works
The means test is applied individually, not per household. For example, in a household with mixed ages, a person aged 80 or over earning more than £35,000 must repay the £200 they received. If a partner under 80 earns less than £35,000, they keep their £100. The net household benefit would then be £100.
The Labour government states that the means test is based on 'taxable income,' which includes the State Pension, private pensions, employment or self-employment income, non-ISA savings interest, and other taxable sources. It excludes ISA savings or investment income, Capital Gains, the Winter Fuel Payment itself, and tax-free benefits like Pension Credit or Attendance Allowance.
Martin Lewis Comments on the Changes
When the payments were reinstated, Martin Lewis said: 'I'm delighted to hear the news that the Chancellor has said the changes to Winter Fuel Payment will be coming in this winter, though we don't have any other further details. The statement says that they will increase the level of the means test. Now, I thought it would be worth explaining the two issues I've always had with the way that the Winter Fuel Payments means test has been put in place. The first one is level. Currently, for a single pensioner, only those earning under £11,800 a year get the £200 or £300 Winter Fuel help. Now, with energy bills still being high and the other support for energy having been taken away, that really was a big hit to the many pensioners just above that limit.'
Impact on Pensioners
The £200 clawback affects those born after 1951 on the new state pension with total income exceeding £35,000. HMRC will adjust tax codes to recover the payment, meaning affected pensioners will see higher tax deductions from their private pensions or other income sources. The move aims to target support to lower-income pensioners, but critics argue it penalises those just above the threshold.
