Millions of retirees across the UK are set to see adjustments to their tax codes from next year, as HM Revenue and Customs (HMRC) begins the process of reclaiming Winter Fuel Payments from those who do not qualify for the support.
Who is affected by the tax code changes?
The changes will impact an estimated four million pensioners whose total income exceeds the £35,000 threshold. These individuals received a Winter Fuel Payment of up to £300 from the start of November 2025 but were not financially eligible to keep it.
For those under the age of 80, who typically received £200, the repayment will be collected gradually through their tax code. The Government has confirmed that HMRC will automatically handle the collection for those who do not already submit self-assessment tax returns.
How much will be deducted and when?
The repayment schedule has been laid out clearly by the authorities. For the 2026 to 2027 tax year, HMRC will change an individual's tax code to deduct approximately £17 per month to recover a typical £200 payment.
The monthly deduction will then increase to around £33 per month during the 2027 to 2028 tax year, as the system collects payments for both the 2026 and 2027 winters. It is scheduled to return to roughly £17 per month for the 2028 to 2029 tax year.
What should pensioners do next?
The process is automatic for the vast majority. If you file a self-assessment tax return online, HMRC will automatically include the Winter Fuel Payment as part of your income on your 2025 to 2026 tax return.
Those who submit a paper tax return must remember to include the payment themselves on the relevant return for the same period. The Government's guidance states that anyone born before September 22, 1959, could have received the payment, but repayment is mandatory if their total income is above £35,000.
This large-scale adjustment highlights the importance for pensioners to understand their tax codes and anticipated income. With the first deductions set to begin in the 2026/27 tax year, affected individuals have time to review their finances and prepare for the adjusted monthly take-home amounts.
