State pensioners losing extra £17 every month to HMRC in tax claw back | Personal Finance | Finance

State pensioners with an income of more than £35,000 are losing an extra £17 per month on average to HM Revenue and Customs (HMRC) as part of a tax claw back.

HMRC has begun reclaiming Winter Fuel Payments from the 2025/26 tax year that were issued to pensioners who exceed the £35,000 inome threshold. Almost two million pensioners are expected to repay their winter 2025 payment and for most, repayments will be taken by HMRC automatically through a tax code change for the current tax year. The tax office has confirmed it will claw back the Winter Fuel Payments, which are worth between £100 and £300, through extra tax charges every month until the payment has been recovered in full.

According to HMRC, a typical Winter Fuel Payment is £200 so PAYE customers with an income of more than £35,000 who received this amount last winter now face extra tax charges of about £17 each month until the money has been fully repayed.

Confirming the claw back of payments from April this year, HMRC said: ” For most, the payment will be recovered through a change to their PAYE tax code from this month (April 2026) with no need to contact HMRC.

“For those in Self Assessment who file online, the payment should be pre-populated in their 2025 to 2026 tax return, due by 31 January 2027. Customers should check and add it manually if it is not shown. Paper filers will need to add it on their tax return, due by 31 October 2026.”

The government department added: “For a typical Winter Fuel Payment of £200, PAYE customers with income more than £35,000 will pay approximately £17 per month extra in tax during the 2026 to 2027 tax year to recover their payment.”

The extra monthly tax charges began in April 2026 and households should have received a letter or email notification from HMRC confirming the change to your tax code to take back the Winter Fuel Payment.

It means that pensioners will pay more tax each month until the full Winter Fuel Payment they received in the 2025/26 tax year is paid in full. Pensioners need to wait for HMRC to take the payment and cannot pay it any sooner.

Explaining how the tax code change will work for basic rate taxpayers, HMRC said: “Your total income is £37,710. This is made up of £25,737 from a private pension and £11,973 from your State Pension. In December, you got a £200 Winter Fuel Payment. Your Personal Allowance is £12,570. We’ll reduce your tax free amount by:

• £11,973 (your State Pension)
• 1,000 (1,000 × 20% = the £200 Winter Fuel Payment you need to repay)

“This is your total deductions. £12,570 (Personal Allowance) – £12,973 (total deductions) = –£403 of tax free allowance. Your new tax code is K39. This means you’ll pay extra tax on £399 of income. You’ll pay around £17 more tax per month.”

The automatic recovery of Winter Fuel Payments for those with an annual income exceeding £35,000 applies across the whole of the UK, including in Scotland where the payment is known as the Pension Age Winter Heating Payment and in Northern Ireland where payments were made by the Department for Work and Pensions (DWP) on behalf of the Northern Ireland Executive. In all cases, recovery is handled by HMRC.

The payment recovery only applies to pensioners who exceed the income threshold and didn’t opt out of getting the Winter Fuel Payment last year.

With the recovery of payments now underway, HMRC has warned pensioners to be on “high alert” for scams and said it will never contact people by text or email to ask them to repay their Winter Fuel Payments, or to request bank details.

Myrtle Lloyd, HMRC’s Chief Customer Officer, said: “Criminals are great pretenders and often use fake letters, emails, calls and texts to impersonate HMRC and trick people into giving them money.

“I’d encourage anyone who’s unsure to use our online tool at GOV.UK to check whether and how their payment will be recovered – there’s no need to call us.”