Guidance added on repaying the Winter Fuel Payment

HM Revenue & Customs added guidance on repaying the Winter Fuel Payment to its "Understanding tax and your pension" page on 28 July 2025¹. The page, first published on 27 March 2025, now sets out how people can check whether they must pay the money back and when HMRC will recover it¹.

The Winter Fuel Payment is available to people born before 22 September 1959, who receive it automatically if eligible¹. Under the guidance, anyone whose total income is over £35,000 must repay the payment¹. HMRC says it will collect the money automatically through the tax code unless the person already files a Self Assessment tax return¹.

For those paying through their tax code, HMRC says it will change the code for the 2026 to 2027 tax year. For a typical payment of £200, it says it will deduct approximately £17 per month¹. In the 2027 to 2028 tax year, the deduction rises to approximately £33 per month for a typical £200 payment, because HMRC will be collecting payments from both 2026 and 2027, before returning to approximately £17 per month in the 2028 to 2029 tax year¹.

People who file Self Assessment returns online will have the payment included automatically on their 2025 to 2026 tax return as part of their income, according to the guidance. Those who file paper returns must include the payment on their 2025 to 2026 return themselves¹.

Why it matters for households

The guidance affects older households that received the Winter Fuel Payment and whose total income exceeds £35,000¹. For them, the payment is not retained: it is recovered later, either by an adjusted tax code from the 2026 to 2027 tax year or through the 2025 to 2026 Self Assessment return¹. The timing matters because the money is clawed back in a later tax year than the one in which it was paid, and the 2027 to 2028 deduction is larger because two years of payments are collected together¹.

The page also sets out the wider tax position for pensioners, noting that income tax applies where total annual income, including pensions, exceeds the Personal Allowance, and that private or workplace pension providers deduct tax before making payments¹. It states that income from an ISA is not taxable¹. HMRC also describes when it may send a Simple Assessment letter, including where someone owes £3,000 or more¹.

What happens next

The recovery through tax codes begins in the 2026 to 2027 tax year, with the higher £33 monthly deduction following in 2027 to 2028 and a return to around £17 per month in 2028 to 2029¹. Self Assessment filers will see the payment included on their 2025 to 2026 return¹. HMRC has not reported any further changes to the repayment process beyond those set out on the page.