Winter Fuel U-Turn: More Pensioners to Receive Payments This Year

Winter Fuel U-Turn: More Pensioners to Receive Payments This Year

What Happened

The government has confirmed that more people will qualify for the winter fuel payment this year, in a U-turn on one of Labour’s first controversial policies. Chancellor Rachel Reeves stated the increased eligibility will be in place “this winter,” though specific details on the new threshold and who qualifies remain vague.

Last year, the payment—worth up to £300—was restricted to those receiving pension credit, a move that cut off support to around 10 million pensioners and drew heavy criticism. The backlash, particularly from charities and MPs, is believed to have contributed to Labour’s weak performance in the local elections.

During Prime Minister’s Questions, Keir Starmer didn’t confirm exactly who would now be included, but said more clarity was on the way. The Chancellor reaffirmed that the means test would be expanded, increasing the number of pensioners eligible. The payment is typically distributed automatically in November or December, though under last year’s system, people needed to apply via pension credit.

Critics, including opposition leader Kemi Badenoch, accused the government of scrambling to fix the policy at the last minute. Reeves rejected the suggestion but admitted departments may not get everything they want in the upcoming spending review, hinting at broader budget pressures.

What Next

Despite the political messaging, the mechanics of the new system remain unclear. The government has yet to announce whether eligibility will be expanded via automatic income thresholds, or through a new claims system. One option under consideration is reclaiming the payment through the tax system from higher earners, or offering tiered support based on income.

Pressure is mounting to reveal the full plan before the Budget in November, when the payments are typically processed. No. 10 has promised to provide “clarity as soon as we can”, though time is tight. Meanwhile, Scotland is pursuing a different model, with a flat £100 payment for those not on pension credit, but that won’t roll out until late 2025.

The issue is likely to form part of the 11 June Spending Review, which insiders warn will be “ugly” as Reeves attempts to balance rising demands with her pledge not to increase day-to-day borrowing or taxes. With decisions pending on issues like the two-child benefit cap, many expect further social policy U-turns could follow.

For now, pensioners just above the pension credit line—and those anxiously awaiting support—will have to wait a little longer to know if they’re back in.