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State pensioners with an income of more than £35,000 will be taxed around £17 extra per month from April.

HM Revenue and Customs (HMRC) is beginning to claw back Winter Fuel Payments paid in Winter 2025 from pensioners who exceed the £35,000 income threshold, with extra tax to be taken every month from April under the payment is fully recovered. HMRC said almost two million pensioners will see their Winter Fuel Payment automatically reclaimed from this month and for most, this will be done via a change to their PAYE tax code.

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.

For a typical Winter Fuel Payment of £200, PAYE customers with an income of more than £35,000 will pay approximately £17 per month extra in tax during the 2026 to 2027 tax year until the payment is fully recovered.

It means that pensioners will pay more tax each month until the full Winter Fuel Payment they received in the 2025/26 tax year is paid in full. Pensioners need to wait for HMRC to take the payment and cannot pay it any sooner.

Explaining how the tax code change will work from April 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 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 last year.

As the recovery of payments begins this month, HMRC is warning 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."