Journalist Dan Whitworth has warned the taxman is poised to deduct £600 from state pensioners
HMRC to start deducting £33 a month from millions of state pensioners
HMRC is set to claw back £33 a month from state pensioners for the next couple of years. BBC Radio 4 Money Box Journalist Dan Whitworth has warned the taxman is poised to deduct £600 from state pensioners over the Department for Work and Pensions ( DWP ) Winter Fuel Payments.
Ben explained that individuals earning over £35,000 annually will be required to repay the payouts from the Labour Party government. Those with a taxable income exceeding £35,000 will need to return the money.
Ben said: “This story, widely reported, relates to upcoming changes to the Winter Fuel Payment (known as the Pension Age Winter Heating Payment in Scotland).”
READ MORE Monzo makes change to buy now, pay later for 13 million customers
“From November, the payment will continue to go automatically to people aged 66 and over to help with heating costs. What’s changed is the introduction of a new income cap.
“Those earning more than £35,000 a year will no longer qualify.
“Rather than withholding payments upfront, the government will pay everyone first and then recover the money from those over the threshold through the tax system.
“Around 2 million people are expected to be affected, and the average amount to be repaid will be up to £300.”
There are two ways in which the money will be reclaimed: either Pay As You Earn (PAYE) – where the sum is deducted monthly from your salary or pension income – or Self Assessment – for those who file tax returns, the amount will be added to the following year’s tax bill.
A spokesperson for HMRC told BBC Morning Live: “For PAYE customers, for a typical payment of £200, we’ll deduct approximately £17 per month. In the 2027 to 2028 tax year, we’ll deduct approximately £33 per month for a typical payment of £200.
“This is because we’ll be collecting payments from 2026 and 2027. It will then return to approximately £17 per month for the 2028 to 2029 tax year.
“If you are confident that you will breach the £35,000 income threshold then you have the option to opt out of receiving the 2026 Winter Fuel Payment.
“Details of how to opt out can be found at gov.uk or mygov.scot from April 1st 2026. You’ll also be able to do this by phone or by post.”