9m pensioners to get Winter Fuel Payment

There was a huge backlash following the government’s announcement last summer that the payment would only go to pensioners claiming benefits, especially as living costs have soared in recent years, leaving many struggling to make ends meet.

Energy bills in particular have increased sharply, and although the price cap is set to reduce in July, they remain much higher than in previous years.

Labour suffered a number of losses in local elections last month, which may have triggered the rethink, despite the prime minister, Keir Starmer, promising straight after the elections that there would be no reversal in the Winter Fuel Payment policy.

The 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 changes will set the government back £1.25 billion, whilst means-testing the Winter Fuel Payment will save around £450m.

Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “The partial U-turn on the winter fuel payment will make a huge difference to the finances of some of the lowest earning pensioners, who had missed out by a hair’s breadth by earning fractionally too much to qualify for Pension Credit. They will now be able to budget for a warmer winter and a less painful squeeze on their finances as the cold nights draw in.

“They’ll also be getting a warm glow from the fact they may have a couple of small cuts in the energy price cap to look forward to between now and then, which should make for a more comfortable winter all round.”

Despite the changes, many pensioners may still find it difficult to cover costs. If you’re worried about making ends meet, you might find some useful tips in our articles The energy bills crisis: what can you do about soaring costs? and Get help with your bills.