Everything we know about winter fuel payment U-turn
Everything we know about winter fuel payment U-turn
Although the news is welcomed by many, there is still some confusion over what the announcement could mean
Charities and MPs were among those who hit out at the move last year
(Image: Getty Images/Image Source )
Huge changes have been announced to Labour's highly controversial policy, which limited how many pensioners could receive the Winter Fuel Payment. Rachel Reeves said more people would qualify for the allowance "this winter", and Prime Minister Sir Keir Starmer said he wanted to widen the threshold for winter fuel in a U-turn on one of his government's first major policies.
However details of the changes and who will be eligible remain unclear, with Sir Starmer failing to confirm how many people will now get it during Prime Minister's Questions on Wednesday. The payment - which is worth up to £300 to help with energy bills during the coldest months - was paid only to those on pension credit last year, but the policy was widely blamed for Labour's poor local election results.
It saw 10 million fewer pensioners receive the money in 2024.
Charities and MPs were among those who hit out at the move, showing concern for those whose income was slightly too high to qualify but then had expensive energy costs to pay. However, the restriction came in a bid to same save around £1.3 billion.
Although the news is welcomed by many, there is still some confusion over what the announcement could mean. For money-saving tips, sign up to our Money newsletter here
Here is everything we know about it so far.
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Winter Fuel Payment means tested
Last year, the Labour government introduced means-testing for the Winter Fuel Payment, meaning only certain pensioners over 66 would receive the money, rather than all pensioners. This resulted in over nine million UK pensioners losing the additional cash last winter.
The move sparked significant backlash against Labour, which has persisted. Legal challenges have been launched against the government's decision, with charities warning it could push more elderly Brits into poverty.
Research by Unite Union revealed that over two-thirds of its retired members had to reduce their heating last winter, a third took fewer baths or showers, and 16% had to cut back on hot meals due to the increased costs of trying to stay warm. The removal of the benefit was also linked to the rise in Reform Councillors in recent elections.
Under the rules, you are eligible for the Winter Fuel Payment if you are over the state pension age of 66 and claiming one of the following benefits during the qualifying week:
Income Support
Income-based Jobseeker's Allowance
Income-related Employment and Support Allowance
Pension Credit
Universal Credit
What was announced this week?
Although there have been no official announcements or changes today, one thing has been verified: Starmer's intention to increase the eligibility of pensioners for this winter's support payment.
According to Jon Greer, Quilter's head of retirement policy, the Prime Minister's suggestion signifies a "notable shift in tone".
Who will benefit from the U-turn?
During Prime Minister's Questions, Sir Keir did not clarify who would benefit from the updated policy, despite acknowledging in a recent BBC interview that there was a pressing need for clarity.
"We will look, again, as I said two weeks ago, at the eligibility for winter fuel, and of course, we'll set out how we pay for it," he responded when Conservative Party leader Kemi Badenoch queried about the number of pensioners, out of 10 million, who would have the allowance reinstated.
The queries arose following Reeves' earlier statement that people "should be in no doubt that the means test will increase and more people will get winter fuel payment this winter".
When will details be announced?
Should the UK government wait until the Budget to announce the changes, it would be just prior to when payments are typically made.
Eligible pensioners receive payments automatically in November or December. Under the current, short-lived system, individuals are required to claim pension credit - a top-up to the state pension for those on low incomes.
Pressure from Welsh First Minister
Eluned Morgan, who had previously urged the government to rethink the cuts to millions of retirees, welcomed the PM's surprise reversal on Wednesday.
She says that Keir Starmer should now provide winter fuel payments to the "majority" of pensioners.
Speaking to the BBC, Ms Morgan said millionaires shouldn't be getting the payment. She said: "I'm not sure if millionaires should be getting a winter fuel allowance. So let's just make sure that they don't get it."
But Ms Morgan added: "People below that, that's where the conversation got to be. I do want the majority of pensioners - I think they made a massive contribution to the country."
Martin Lewis comments
The Money Saving Expert founder said he was "delighted" about the news, in a social media post..
He said it was worth "explaining" the two issues he had always had with the way that the Winter Fuel Payment means-test had been put in place.
He said: "The first one is the level. Currently, for a single pensioner, only those earning under £11,800 a year get the £200 or £300 winter fuel help. Now with energy bills still high and other energy bill help being taken away, that really was a big hit to the pensioners who were just above that limit.
"I'm hoping to see this limit increase from the current £11,800 up to £20,000 or more. Perhaps they might only do it and link it to higher-rate taxpayers."
He added: "The means test that they linked Winter Fuel payment to was Pension Credit. Now, Pension Credit has long been a flawed benefit which has been critically underclaimed, and even now, after all the communication over Winter Fuel, there are still 700,000 eligible pensioners who should get Pension Credit and thus winter fuel payments who don't because they don't claim.
"Often, it will be vulnerable people with onset dementia or people who just can't go through the complicated process, especially on forms, or the message hasn't been passed on to them as it's quite difficult to explain the level of income that you need to get it.
"So let's just put that into perspective, 700,000 people who have a total income of under £11,800 a year are missing out on the Winter Fuel Payment, even though that's the level the government says they should get it.
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"So my big message to the Chancellor is, don't just increase the threshold. You have to look at the means test mechanism to make sure that the most vulnerable pensioners in this country, if they have income below your threshold, actually get the Winter Fuel Payment. And my fingers are crossed they'll be listening."
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