The DWP has confirmed it will be sending letters to pensioners in April 2026 to inform them about tax code changes for Winter Fuel Payment repayments
The Department for Work and Pensions (DWP) has announced it will be sending letters to pensioners who must repay their Winter Fuel Payment later this year.
The welfare department has confirmed that it will soon be contacting pensioners who are due to have their tax code altered in order to return the money. The government distributed payments of up to £300 to pensioner households during the winter months, but anyone with an income exceeding the £35,000 threshold will need to return the money to HMRC.
From November last year, Winter Fuel Payments were issued to those born before 22 September 1959, unless they had chosen not to receive the payment, to assist them with living costs. However, only pensioners with an income below £35,000 are eligible to retain it.
From April, HMRC will begin recouping the money from those who exceed the income threshold, reports the Manchester Evening News.
There are two methods by which the tax department will reclaim the cash, depending on how tax is typically paid. For pensioners who pay tax through PAYE, HMRC will collect payment for the 2025 to 2026 tax year by adjusting their tax code for the 2026 to 2027 tax year.
This will result in paying more tax each month to repay the full payment. For instance, for a typical payment of £200, you would pay approximately £17 per month extra in tax from April.
The government has now confirmed that these pensioners can expect a letter or email outlining the tax code change in April.
On the GOV.UK website, the DWP said in an update: “In April 2026, you’ll get a letter or an email notification to tell you that we’ve changed your tax code to take back your Winter Fuel Payment. This will show as an underpayment. Any tax code letter or notification before this will not include this change.”
The second way HMRC can collect take back the Winter Fuel Payment is through a self assessment tax return. For pensioners who do a self assessment tax return, the payment will need to be included.
For those who file online, the payment will be automatically included.
HMRC calculates income individually rather than as a household. That means that if your total personal income is above £35,000, you will have to return the money, however if you live in a household with someone who earns less than this amount they will still receive the payment.
For example, if you earn £36,000 and your partner earns £22,000, HMRC will take back your payment, but your partner will keep their payment.