HMRC confirms £17 extra tax charges for state pensioners every month | Personal Finance | Finance

HM Revenue and Customs (HMRC) has confirmed extra tax charges of around £17 per month for state pensioners with an income of more than £35,000.

The extra monthly tax charges are to repay Winter Fuel Payments that were issued in the 2025 to 2026 tax year to pensioner households who exceed the £35,000 income threshold. The government department 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. HMRC has confirmed this will be done automatically via a change in tax code for the 2026 to 2027 tax year and will affect almost two million households.

For pensioners in Self Assessment who file online, the payment should instead be pre-populated in their 2025 to 2026 tax return, due by January 31, 2027. Pensioners should check the payment is there and in cases where it’s not shown, it should be added manually. Those who file paper returns will need to add it to their tax return by October 31, 2026.

According to HMRC, pensioners with an income above the £35,000 threshold who received a typical Winter Fuel Payment of £200 will pay about £17 per month extra in tax.

HMRC said: “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 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 added: “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 last month 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.”