HM Revenue & Customs (HMRC) will begin recovering Winter Fuel Payments in advance from April 2027, the Department for Work and Pensions (DWP) has confirmed. The change affects pensioners in England, Wales, and Northern Ireland receiving the Winter Fuel Allowance, as well as those in Scotland getting the Pension Age Winter Heating Payment, where total household income exceeds £35,000.
How the advance recovery will work
For PAYE customers with incomes above £35,000, HMRC will automatically collect the payment through an adjustment to their tax code. From April 2027, collections will happen in the same year the payment is issued, which means some pensioners could face repaying two years' worth of payments simultaneously if they have not opted out.
Customers may see two Winter Fuel Payment amounts included in their tax code from January 2027, rather than April 2027 as previously communicated. This is because collection for the 2026-2027 year may start within the final months of the 2026-2027 tax year, alongside the collection of the 2025-2026 payment.
Repayment amounts and tax code changes
No one will repay more than they received, with typical monthly deductions of £30 to £33 over a period of 12 to 15 months. For a typical payment of £200 received in both 2026-2027 and 2027-2028, this would mean monthly deductions of around £30 to £33 in tax.
The Labour Party government stated: "For PAYE customers, HMRC will automatically collect their Winter Fuel Payment through a change to their tax code unless they already file a Self Assessment tax return. These customers do not need to take any action, and do not need to contact HMRC."
Self Assessment customers and next steps
Self Assessment customers must include the Winter Fuel Payment on their tax return for the year in which they received it. Where possible, HMRC will include this automatically for online filers, but customers should check and include it themselves if it has not automatically been included. Anyone who files a paper tax return will need to add the payment themselves.
The government added: "From April 2027, HMRC will start collecting Winter Fuel Payments in advance during the same year they are paid. This means anyone who received a 2026 to 2027 Winter Fuel Payment and has not opted out of the 2027 to 2028 payment, will repay both payments at the same time."
There is no change to the collection process for customers who complete a Self Assessment tax return. The government confirmed: "No one will pay back more Winter Fuel Payment than they received."
