Chancellor Rachel Reeves has confirmed that more pensioners will be eligible for the Winter Fuel Payment this year, signalling a U-turn on one of Labour’s earliest and most contentious policies.
The payment – worth up to £300 – had previously been limited to those receiving pension credit, cutting support to around 10 million pensioners in 2024. The restriction was widely blamed for Labour’s poor local election results.
While Reeves assured voters that “the means test will increase and more people will get winter fuel payment this winter,” she stopped short of confirming exactly who will now qualify. The lack of detail has led to growing pressure from charities, MPs and opposition parties to clarify eligibility and delivery timelines, especially with payments usually landing in November or December.
Prime Minister Sir Keir Starmer acknowledged that the government was “looking again” at the rules, but offered no firm answers during Prime Minister’s Questions on Wednesday. “We will set out how we pay for it,” he said, when challenged by Conservative Party leader Kemi Badenoch on whether all 10 million pensioners previously excluded would regain access to the payment.
Downing Street has since promised to provide clarity “as soon as we can”, amid warnings from Age UK that a delay could leave vulnerable pensioners unprotected during the coldest months.
The initial decision to restrict the previously universal payment to pension credit claimants only was one of the first made by Reeves after Labour’s landslide victory. Critics, including Liberal Democrat treasury spokesperson Daisy Cooper, described the handling of the issue as a “debacle” that had “caused needless misery for millions of pensioners”.
Torsten Bell, the pensions minister, confirmed that a full return to the universal model was not on the table. “It’s not a good idea that we have a system paying hundreds of pounds to millionaires,” he said, indicating that targeted support would remain the preferred approach.
The Chancellor has suggested the government is now in a stronger financial position, making the expansion possible. “We have stabilised the economy,” Reeves said in a speech in Manchester on Wednesday, as she also unveiled £15bn of transport investment for the Midlands and North.
However, speculation continues over how the new eligibility criteria will be implemented. Potential models include allowing pensioners within a certain income band to apply or clawing back the payment via the tax system for higher earners. No firm decision has yet been disclosed.
In contrast, Scotland has already proposed a different model. Under a new devolved scheme set to launch in 2025, those on qualifying benefits such as pension credit will continue receiving the full amount, while others will receive a reduced £100 payment per household.
The announcement comes in the run-up to what insiders describe as an “ugly” spending review, due on 11 June. With Reeves ruling out further tax rises or borrowing for day-to-day spending, departmental budgets are expected to be tight. “Not every department will get everything that they want,” she admitted, raising the prospect of cuts elsewhere.
As pressure mounts to reverse other unpopular welfare decisions – including the two-child benefit cap – Sir Keir avoided addressing the issue directly during PMQs. Introduced in 2015 by former chancellor George Osborne, the cap remains a source of controversy among Labour MPs and campaigners.
With just months until winter begins, the government’s challenge now is to set out clear criteria and mechanisms for the expanded fuel payment – and to ensure the funds reach those who need them most, without further delay.
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Winter fuel payment U-turn in place this year, but key details remain unclear