HMRC has confirmed a £17 per month extra charge for state pensioners born before 1960 who receive the Winter Fuel Payment. The Labour government will pay millions of state pensioners the £200 or £300 Winter Fuel Payment this year.
Under HMRC rules, pensioners will have to repay the sum if their income exceeds £35,000. HMRC explains the clawback method: "For example, for a typical payment of £200, you’ll pay about £17 per month extra in tax."
In April 2026, pensioners will receive a letter or email notification informing them that HMRC has changed their tax code to recover the Winter Fuel Payment. This will appear as an underpayment.
Once HMRC has confirmed income for the 2025 to 2026 tax year, the tax authority will check whether the repayment is still necessary. If not, the tax code will be updated to remove the charge.
HMRC will also ask the pension provider or employer to refund any extra amount already paid through pension or employment. The payment must be repaid through the usual Self Assessment tax return and cannot be paid earlier.
HMRC states: "If you file your tax return online, where possible we’ll automatically include the amount of your payment as a tax charge. It will show on your 2025 to 2026 return, as the winter fuel payment charge. You should check that your payment is automatically shown on your online return and include it if it is not. If you file a paper Self Assessment tax return, you’ll need to add the payment to your 2025 to 2026 tax return."
The payment will be repaid through the Self Assessment tax bill in the tax year it is received, unless the pensioner opts out of receiving the payment.
