HMRC has confirmed a £200 tax charge for state pensioners born after 1946, as it moves to reclaim the Winter Fuel Allowance from those with higher incomes. The tax authority will assess each individual's personal income to determine whether the payment must be returned.
Who Will Be Affected?
If you have received the Winter Fuel Payment (known as the Pension Age Winter Heating Payment in Scotland), HMRC may take it back depending on your total income for the tax year. Those with an income of £35,000 or less will keep the payment, while those earning more than £35,000 will have it clawed back.
For households where more than one person has received the payment, HMRC will consider each person's income separately. For example, if your income is £36,000 and your partner's is £22,000, HMRC will reclaim your payment, but your partner will retain theirs.
What Income Is Included?
State pensioners must include all personal income when calculating their total, including:
- State Pension
- Company and personal pensions
- Earnings from employment
- Interest from savings
- Dividends from company shares
- Income from a trust
- Taxable state benefits
- Net profits from self-employment
- Rental income from property
If you have income from a joint source, such as a joint savings account, you should only include your share.
How Will HMRC Reclaim the Payment?
HMRC explains that you cannot pay back the amount as a lump sum. Instead, the repayment will be made by adjusting your tax code for the 2026 to 2027 tax year, meaning you will pay more tax each month to recover the full payment received in the 2025 to 2026 tax year. In April 2026, you will receive a letter or email notification confirming the tax code change, which will show as an underpayment.
HMRC adds: 'Once we've confirmed your income for the 2025 to 2026 tax year, we'll check whether you still need to repay this amount. If you do not need to repay the Winter Fuel Payment, we'll update your tax code to remove it. We'll also ask your pension provider or employer to refund the extra amount you already paid through your pension or employment.'
