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HM Revenue & Customs (HMRC) has confirmed that some state pensioners will face an additional monthly tax charge of around £17 as part of the recovery of the Winter Fuel Payment, depending on their income. The change relates to the rules governing the Winter Fuel Payment (and in Scotland, the Pension Age Winter Heating Payment), which is a seasonal payment designed to help older people with heating bills. Under the updated approach, the payment is no longer fully kept by all recipients and may be recovered by HMRC if a pensioner's income exceeds £35,000 in the relevant tax year.

HMRC has said that individuals with a total annual income of £35,000 or less will keep the payment in full. However, those earning above that threshold will have the payment taken back through the tax system.

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This is not collected as a one-off bill. Instead, it is recovered automatically by adjusting the recipient's tax code in a later tax year. This means pensioners will pay slightly more tax each month rather than repaying the money as a single lump sum. For those with an income above the £35,000 threshold who received a typical Winter Fuel Payment of around £200, this works out at roughly £17 extra in tax per month over the year.

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 started in April. 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.

For most, the payment will be recovered through a change to their PAYE tax code from 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.

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

Pensioners have also been warned to be on high alert for scams.

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."