Chancellor of the exchequer Rachel Reeves today (4 June) confirmed that the winter fuel payment will be extended to more pensioners this year.
“People should be in no doubt that... more people will get winter fuel payment this winter,” Reeves told a press conference in Manchester.
But her comments came on the same day that a UK pensions minister has confirmed there won’t be a return of a universal winter fuel allowance for pensioners, despite the wider eligibility.
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Labour means-tested the winter fuel payment as one of its first moves when it took office last summer. Last month, prime minister Keir Starmer appeared to signal a U-turn when he told the House of Commons he wanted to ensure “more pensioners are eligible for winter fuel payments” going forward.
The remark raised hopes that the pre-existing system, whereby all pensioners were automatically given the payment, would be restored.
Pensions minister Torsten Bell today confirmed any changes to eligibility wouldn’t go that far.
“On your question of is there any prospect of a universal winter fuel payment, the answer is no,” Bell told the Work and Pensions Committee. “I think most people agree that it’s not a good idea that we have a system paying a few hundreds of pounds to millionaires, and so we’re not going to be continuing with that.”
Changes to the winter fuel payment scheme are expected though, as Bell said the government “will be looking at making more pensioners eligible”.
Tom Selby, director of public policy at AJ Bell, said “It’s no surprise Torsten Bell has ruled out a complete U-turn to revert back to paying the winter fuel payment to every pensioner, as that would cost this financially hampered government too much money and loss of face.
“Instead, it wants to push the boundaries of eligibility to include more pensioners.”
What prompted Labour’s winter fuel allowance U-turn?
Labour said it would scrap winter fuel payments for millions of pensioners in July by means-testing the benefit, labelling it a “tough decision”. It has proved a deeply unpopular decision and could have contributed to Labour’s poor performance during May’s local elections.
Starmer and Reeves insisted the government had no choice but to means-test the payments due to the lack of headroom in Reeves’ self-imposed fiscal rules.
But stronger than expected economic growth has allowed some flexibility for the U-turn – the UK economy grew more than expected in the first three months of 2025.
Speaking to MPs, Starmer said: “The economy is beginning to improve... but I recognise that people are still feeling the pressure of the cost of living crisis, including pensioners.
“As the economy improves we want to make sure that people feel those improvements as their lives go forward.”
Starmer said details on the policy will be looked at “as part of a fiscal event,” adding that the government “will only make decisions we can afford”.
How much is the winter fuel payment?
The winter fuel allowance is worth £200 a year for pensioners under 80, increasing to £300 for over-80s, paid in November or December.
Research from the Centre for Ageing Better previously found 2.5 million were impacted by the removal of the payment. The foundation argued the government went too far by only restricting the payments to people eligible for Pension Credit.
The trade union Unite, one of the Labour party’s biggest donors, said in November that it would take legal action against the government in response to the cut.
Unite general secretary Sharon Graham said: “The government should never have picked the pocket of pensioners.”
Fury over winter fuel payment changes as well as the rest of Labour’s tenure in power was voiced at May’s local elections which saw Labour lose around two thirds of the seats it was defending.
In the wake of the local elections in England, health secretary Wes Streeting said ministers were "reflecting on what the voters told us".
Who can claim the winter fuel payment?
The winter fuel payment is an annual tax-free allowance that aims to help pensioners pay their energy bills during the coldest months of the year.
Pensioners have been eligible for some support on energy bills since 1997, but since 2024, the support has been means-tested.
The government appears to have put itself in a confusing position with its back-and-forth on winter fuel payment eligibility. “It now faces a dilemma in determining exactly who should be eligible,” says Selby.
“One option on the table is to award the payment to everyone receiving a state pension, clawing the money back from higher income households, potentially through their tax returns,” Selby suggests. “This might look something like the process for clawing back child benefit for working households, although that has caused mass confusion among taxpayers bamboozled by the complexity of the rules.
“Wherever their head scratching takes them, British pensioners are on tenterhooks to see if they qualify for a warmer winter this year. We could get an announcement as soon as next week at the Spending Review, but the government will be hoping to put the issue to bed at the Autumn Budget.”
Households will be eligible for up to £200 if they receive Pension Credit, or £300 if they receive Pension Credit and have a household member aged 80 plus.
Pension Credit is one of the most underclaimed and misunderstood benefits, worth £3,900 a year on average. The benefit essentially tops up your state pension if you are on a low income.
Pension Credit will top you up to £227.10 per week if you are single, or £346.60 if you are a couple. You may get extra amounts if you have other responsibilities and costs.
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