Winter fuel payment changes welcomed by campaigners
The payment, worth up to £300, will be restored to the vast majority of pensioners - around nine million in total - who previously received it because anyone with an income of under £35,000 a year will now get the payment automatically.
Simon Francis, coordinator of the End Fuel Poverty Coalition, commented:
"Finally the Chancellor has seen sense. Axing the Winter Fuel Payment for so many pensioners was a cruel cut to make.
"Millions of pensioner households faced unaffordable energy costs last winter. While the changes will provide some relief to these households, there will still be pensioners unable to afford the high cost of energy and living in cold damp homes.
"So now the Government must focus on how it supports all households in fuel poverty and implements the long term measures needed to bring down the cost of energy for good. This includes full investment in the Warm Homes Plan to improve energy efficiency of homes and market reforms to bring down the price households pay for electricity."
The full details were announced here.
Millions of pensioner households faced unaffordable energy costs last winter.
While the changes will provide some relief to these households, there will still be pensioners unable to afford the high cost of energy and living in cold damp homes.
So now the Government must focus… https://t.co/ncvxLnEdPI — End Fuel Poverty Coalition (@EndFuelPoverty) June 9, 2025
Devolved authorities in Scotland and Northern Ireland will each receive a funding uplift so they too can meet the new threshold.
Independent Age chief executive Joanna Elson said: 'We are pleased that the UK Government has listened to the voices of older people on a low income and reconsidered what was an incredibly damaging change to the winter fuel payment.
'By widening the eligibility criteria, more older people in financial hardship will now receive this vital lifeline in time for winter.
'Our helpline receives thousands of calls from older people making drastic cutbacks just to get by and the changes to the winter fuel payment made this worse. For millions living on low incomes, the entitlement supports them to turn their heating on and stock up on food during the colder months.
'While the changes to the winter fuel payment are positive, they are not a silver bullet that will end pensioner poverty.'
She added: 'There needs to be a cross-party consensus on the adequate income needed in later life to avoid financial hardship. Once this is established, every older person should be supported to receive this amount. Nobody should have to live in poverty as they age.'
Also welcoming the Government's announcement, Carole Easton, chief executive at the Centre for Ageing Better, said: 'The Government is right to revisit the eligibility of winter fuel payments.
'It was always clear that setting the pension credit eligibility as the threshold of support was too low and would put the health of millions of low-income pensioners at risk.'
She said 'the dangers of cold homes are very real', adding: 'Living in a cold home can harm people in numerous ways, including increased blood pressure which increases heart attack risk, suppressed immune response which increases risk of respiratory infections such as pneumonia and chest infections.
'Cold conditions reduce dexterity and grip strength which can lead to dangerous falls, and they lead to worse mental health outcomes too.
'Reform of eligibility around the winter fuel payments will help avoid unnecessary suffering this winter.
'But we need a longer-term solution which eventually could reduce or remove the need for such payments.'
Rachel Reeves said there was still 'work to do to ensure the sums always add up'.
Caroline Abrahams CBE, Charity Director at Age UK said: 'The Government's Winter Fuel Payment announcement makes this a good day for older people.
"The decision to restore the Winter Fuel Payment to 9 million pensioners - all but those on the highest incomes who should be able to pay their heating bills without it - is the right thing to do and something that will bring some much-needed reassurance for older people and their families. At Age UK we heard from many through the winter who were so frightened about their bills that they didn't even try to keep their homes adequately warm."
The Chancellor told Sky News: 'The Office for Budget Responsibility increased the growth forecast for every other year in the forecast, they said that our reforms to the planning system would make the economy £6.8 billion bigger, bringing in additional tax revenue as well.
'And in the first quarter of this year, we were the fastest growing economy in the G7.
'There's still work to do to ensure that the sums always add up, but because of the decisions that we've made, because of the stability we've returned to the economy, we are now able to pay the winter fuel payment to more pensioners.
'We're not going back to the universal system. I don't think it is right that the very richest pensioners have their fuel bills subsidised, but this year nine million pensioners will get the winter fuel payments.'
Pensioners who do not want to receive the payment will be able to opt out, according to the Treasury.
The decision to limit the winter fuel payment to only those who claimed pension credit was one of Labour's first acts in Government, aimed at balancing what was described as a £22 billion 'black hole' in the public finances.
This meant the number of pensioners receiving the payment was reduced by around 10 million, from 11.4 million to 1.5 million.
The Treasury claims the new arrangement will cost £1.25 billion in England and Wales, while means-testing winter fuel will save the taxpayer £450 million.
NEWS! Winter Fuel Payment to be reintroduced for all state pensioners but clawed back through tax if you earn £35,000+.
My instant analysis of how it works, what it means and is it an improvement.
(Still working on subtitled version, I will post a link to it in reply to this… pic.twitter.com/NjkFxGbKwN — Martin Lewis (@MartinSLewis) June 9, 2025
Chancellor Rachel Reeves said: 'Targeting winter fuel payments was a tough decision but the right decision because of the inheritance we had been left by the previous government.
'It is also right that we continue to means test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest.
'But we have now acted to expand the eligibility of the winter fuel payment so no pensioner on a lower income will miss out.
'This will mean over three-quarters of pensioners receiving the payment in England and Wales later this winter.'
The news has also been welcomed by Money Saving Expert founder Martin Lewis, who said: "Winter Fuel Payment to be reinstated for all State Pensioners this winter, but then clawed back via tax system for all who earn over £35,000 (roughly average earnings). This is a big improvement."
Age UK responds to news that nine million pensioners will receive a Winter Fuel Payment this winter https://t.co/SQe4fF6sbu — Age UK News (@AgeUKnews) June 9, 2025
Those with an income above this threshold will also receive the payment, but it will then be reclaimed from them in tax.
To be eligible for the winter fuel allowance, a person will need to have reached state pension age by the week starting September 15 this year.
Some two million pensioners who earn more than £35,000 will see their winter fuel payments clawed back via the taxman, the Treasury estimates.
But, Kemi Badenoch, Leader of the Opposition, claimed the Prime Minister had 'scrambled to clear up a mess of his own making'.
Recommended reading:
Liberal Democrat Leader Sir Ed Davey said: 'Finally the Chancellor has listened to the Liberal Democrats and the tireless campaigners in realising how disastrous this policy was, but the misery it has caused cannot be overstated.
'Countless pensioners were forced to choose between heating and eating all whilst the Government buried its head in the sand for months on end, ignoring those who were really suffering.
'We will now study the detail of this proposal closely to make sure those who need support actually get that support. The pain they went through this winter cannot be for nothing.'
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