In the latest U-turn after months of backlash, the government has announced a massive expansion of who will receive winter fuel payments.
After weeks of speculation over what the changes would look like, it has now been confirmed that 9 million pensions will be eligible for the payment – a huge uplift from the 1.5 million pensioners who received the payment in winter 2024-25.
Here, The Independent looks at how the new system will work and who will be affected by the uplift.
How many people did the winter fuel payment cut affect?
The winter fuel payment is a state benefit previously given to all pensioners to help with energy costs during the coldest months of the year.
The decision to means-test the previously universal payment was one of the first announcements by Rachel Reeves when she became chancellor after Labour’s landslide election victory last year, and it has been widely blamed for the party’s collapse in support.
The government has insisted the policy was necessary to help stabilise the public finances, and meant that the payment would only go to those on low incomes who received specified benefits such as pension credit.
This meant the number of pensioners receiving the payment was reduced from 11.4 million to 1.5 million.
Several charities, MPs and unions criticised the decision, with some blaming it for the party’s disappointing local election results.
In November, it was revealed that the government’s own figures indicated it would force 100,000 pensioners into poverty in 2026.
How was the payment linked to pension credit?
Only those who claim pension credit were able to receive the winter fuel payment in winter 2024.
Those who are above state pension age and have an income of less than £218.15 a week, or less than £332.95 as a joint weekly income with your partner, are eligible for pension credit.
However, despite the government’s campaigns and an increase in claims after the July 2024 announcement, it is estimated that half a million eligible people fail to claim the benefit.
How will the new system work?
The government has increased the threshold at which people over the state pension age become eligible for the payment, meaning that anyone with an income of or below £35,000 will receive it this winter.
The government estimates that the new threshold will ensure that more than three quarters of pensioners in England and Wales – around 9m people – will receive the benefit.
It is estimated that around 2 million pensioners in England and Wales have taxable incomes above £35,000 and will therefore be exempt.
The payment of £200 per household, or £300 per household where there is someone over 80, will be made automatically this winter, meaning no pensioner will need to take any action in order to receive the payment.
Those with incomes above the threshold will see the payment automatically recovered via HMRC, or they have the option to opt out. However, details of how this will work are yet to be confirmed.
Ministers estimate the change will cost the taxpayer £1.25bn in England and Wales, saving around £450m compared to when the winter fuel payment was universally available.
The Treasury has not yet set out how it will pay for the uplift, but has insisted the costs will be accounted for at the autumn budget and incorporated into the next OBR forecast. They have also promised it will not lead to permanent additional borrowing.
