Around 2.2 million people currently receive the one-off discount on their electricity bills between September and March every year under the Warm Home Discount scheme.
The government said energy firms with more than 150,000 customer accounts – currently 250,000 – will be obliged to offer the discount by 2021.
That is expected to help an extra 20,000 pensioners in 2019/20 and a further 10,000 in 2020/21.
The threshold will be reviewed after 2021 when it could continue to fall, “potentially to zero or a small minimum”.
It is part of the government’s plans to “increase consumer choice and improve switching for vulnerable customers” to tackle fuel poverty.
Energy and Clean Growth Minister Claire Perry said: “Everyone who is automatically eligible for the £140 discount on their energy bills each winter should be able to get it. It shouldn’t be dependent on which energy supplier they are with so we want to change that.
“This is why, as part of our commitment to create an energy market that works for everyone, we are lowering the threshold so more smaller suppliers will be able to offer this lifeline discount to their customers who most need it.”
Ms Perry will be headlining the Energy Live Future conference on 31st October in London.