HMRC confirms £33 extra monthly tax charges for state pensioners | Personal Finance | Finance

HM Revenue and Customs (HMRC) has confirmed extra monthly tax charges of around £33 for state pensioners with an income of more than £35,000.

Pensioners who exceed a £35,000 income threshold will face extra tax charges every month to repay Winter Fuel Payments unless they opt out of receiving the payments. HMRC has confirmed that pensioners who get payments in the 2026 to 2027 and 2027 to 2028 tax years will see the money clawed back for the two tax years via a tax code change until the amount has been recovered in full. Winter Fuel Payments are worth between £100 and £300 per month, witha typical payment amounting to £200.

HMRC has confirmed the recovery of payments will be carried out automatically via a change in tax code and those who receive a payment in each tax year of £200 will need to pay around £33 per month extra in tax in the 2027 to 2028 tax year.

HMRC has already begun reclaiming payments for the 2025 to 2026 tax year and sent out letters or email notifications to pensioners confirming a change in tax code in April.

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.

Those affected will pay more tax every month in the current tax year to pay back the Winter Fuel Payment in full. According to HMRC, pensioners with an income above the £35,000 threshold who received a Winter Fuel Payment of £200 will pay about £17 per month extra in tax in the 2026 to 2027 tax year.

This amount will rise to around £33 per month in extra tax in the 2027 to 2028 tax year for a typical Winter Fuel Payment of £200, unless pensioners opt out of receiving the payment.

HMRC said: “If you receive payments in the 2026 to 2027 and 2027 to 2028 tax years: Unless you opt out of receiving the payment, we’ll collect your payments for the 2 tax years by changing your tax code for the 2027 to 2028 tax year.

“For example, if you receive a payment in each tax year of £200, we’ll deduct about £33 per month extra in tax in the 2027 to 2028 tax year.

“If you receive a payment for the tax year 2028 to 2029 or onwards, we’ll collect your payment by adjusting your tax code for the tax year in which you receive the payment.”

Pensioners who wish to op out of getting the Winter Fuel Payment to avoid the extra tax charges each month need to either complete an opt out form before 11.59pm on September 20, 2026, or call the Winter Fuel Payment helpline before 6pm on September 18, 2026.

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.

With the recovery of payments for the 2025 to 2026 tax year 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.”