A Sweeping Reversal: Over 75% of Pensioners to Receive Winter Fuel Payment

 as Reeves Confirms Major U-Turn
London, UK – June 9, 2025 – In a significant policy shift that will bring relief to millions of older Britons, Chancellor Rachel Reeves today announced a major U-turn on the contentious winter fuel payment, confirming that more than 75% of pensioners in England and Wales will receive the vital financial assistance this coming winter. The decision, which marks a substantial expansion of eligibility criteria, aims to address widespread public concern and comes after intense pressure following earlier restrictions that saw millions lose out on the payment.
The original changes, implemented for the 2024/2025 winter period, had controversially limited the Winter Fuel Payment to only those pensioners in receipt of Pension Credit or other specific means-tested benefits. This drastic curtailment of eligibility led to an estimated 10 million pensioners losing access to the annual support, sparking a considerable backlash from charities, opposition parties, and the public, with many describing it as a devastating blow to those struggling with rising energy costs. The policy had been widely cited as a contributing factor to the government's struggles in recent local elections.
Today's announcement by Chancellor Reeves signifies a dramatic re-evaluation of that approach. Under the new, expanded rules, all pensioners in England and Wales with an annual income of £35,000 or less will now qualify for the Winter Fuel Payment. This revised threshold is broadly in line with average earnings and is expected to bring around 7.5 million more pensioners back into the fold, compared to the previously restricted system. In total, approximately nine million pensioners are now set to benefit from the allowance.
The Winter Fuel Payment is a tax-free annual sum designed to assist older individuals and households with their heating costs during the colder months. Traditionally, the payment amounts have varied, with households where the oldest person is between State Pension age and 79 typically receiving £200, and those with someone aged 80 or over receiving £300. These amounts are expected to remain consistent for the upcoming winter. The payment is made automatically to eligible households, usually in November or December.
Crucially, the U-turn means that eligibility will no longer be solely tied to the receipt of Pension Credit or other specified means-tested benefits. This addresses a major criticism of the previous policy, as many eligible pensioners had historically failed to claim benefits like Pension Credit due to various factors, including lack of awareness, perceived stigma, or the complexity of the application process. While the government maintains its commitment to means-testing to ensure the payment is targeted and fair, rather than a universal handout to the wealthiest, the significantly increased income threshold represents a pragmatic compromise.
However, the change is not without its nuances. Pensioners with an annual income exceeding £35,000, estimated to be around two million people in England and Wales, will continue to miss out on the payment. For those in this income bracket who still receive the payment automatically, the Treasury has confirmed that the full amount will be collected via PAYE (Pay As You Earn) or through their Self-Assessment tax return. This mechanism aims to ensure that the support remains focused on lower and middle-income pensioners. Individuals in this higher income bracket will also have the option to opt out of receiving the payment.
The cost of this significant policy reversal is estimated by the Treasury to be around £1.25 billion for England and Wales. This stands in contrast to the estimated £1.4 billion saving projected from the original, more restrictive policy. Despite the increased expenditure, the government asserts that the continued element of means-testing will still result in a saving of approximately £450 million compared to a full return to universal Winter Fuel Payments.
For those in Scotland, the situation is slightly different. The Scottish Government had already outlined its own policy, introducing a new benefit – the Pension Age Winter Heating Payment (PAWHP) – to replace the UK Government's Winter Fuel Payment on a "like-for-like" basis. While the Scottish scheme also provides payments of £100, £200, or £300 depending on circumstances, it aims to ensure all eligible pensioner households in Scotland qualify, moving away from a solely means-tested approach. However, the full implementation of the Scottish benefit is not expected until late 2025.
Today's announcement has been largely welcomed by pensioner advocacy groups and charities, who had vociferously campaigned against the previous restrictions. While acknowledging that the changes are a positive step, many continue to call for broader measures to ensure the long-term financial security and well-being of all older people in the UK. The government, for its part, hopes this decisive action will draw a line under a contentious policy and provide much-needed reassurance to millions of pensioners ahead of the colder months.
Source@BBC