Newsletter issue – March 2026
Some state pensioners will receive updated PAYE tax codes. This is to recover winter fuel payments from those whose total income exceeded £35,000 in the 2025-26 tax year.
The UK Government has introduced a new income-threshold system, replacing the old Pension Credit-linked eligibility rules. Around two million pensioners are expected to repay their winter fuel payment through the tax system. They will be notified by letter or via the HMRC app.
All eligible pensioners still receive the winter fuel payment automatically. If their income is above £35,000, HMRC adjusts their tax code to reclaim £200 for those under 80 and £300 for those aged 80+. Repayments are spread across the tax year via PAYE-roughly £17 per month for a £200 repayment. Pensioners cannot repay in a lump sum; it must be done through tax code adjustments.
HMRC will recover payments during the 2026-27 tax year by altering tax codes. After the tax year ends, HMRC will check whether the correct amount was collected. If not enough was recovered, a tax calculation will be issued for any remaining balance.