More than three-quarters of pensioners will now receive the winter fuel payment this year after Chancellor Rachel Reeves confirmed a major U-turn on Labour’s previous policy.
Around nine million pensioners with incomes below £35,000 will now be eligible for the payment, worth up to £300, reversing last year’s restrictions that limited it to those on pension credit.
The climbdown follows intense criticism from campaigners and voters, with the original cut widely blamed for Labour’s poor performance in the recent local elections. Conservative leader Kemi Badenoch called the reversal a “humiliating U-turn”.
Ms Reeves said: “We’ve listened to people’s concerns. Because of the changes we’ve made and the stability we’ve brought back to the economy, we’re now able to increase that amount.”
The decision comes just ahead of tomorrow’s Spending Review. The chancellor said the £1.25bn cost would be accounted for in the autumn Budget, with no breach of her borrowing rules.
Under the revised scheme, households with a person under 80 will receive £200 in November or December, rising to £300 for those over 80.
In shared households, payments are halved unless both pensioners fall under the income threshold.
A higher-earning pensioner living with a lower-income one will receive nothing, while the lower-income resident receives half.
About two million pensioners with incomes above £35,000 will be automatically excluded or able to opt out, with payments reclaimed where necessary.
The Government is expected to face questions over how the new policy will be implemented quickly and fairly.
Critics say the means test could still leave some ineligible pensioners struggling with energy bills this winter.
Reactions have been measured…
Caroline Abrahams CBE, Charity Director at Age UK said: “The decision to restore the Winter Fuel Payment to 9 million pensioners – all but those on the highest incomes who should be able to pay their heating bills without it – is the right thing to do and something that will bring some much-needed reassurance for older people and their families.
“At Age UK we heard from many through the winter who were so frightened about their bills that they didn’t even try to keep their homes adequately warm.
“We have always said what really matters is that the estimated 2.5 million older people who lost their Winter Fuel Payment, when they couldn’t afford it, get the money back, by one means or another.”
Simon Francis, coordinator of the End Fuel Poverty Coalition, commented:”Finally the Chancellor has seen sense. Axing the Winter Fuel Payment for so many pensioners was a cruel cut to make.
“Millions of pensioner households faced unaffordable energy costs last winter. While the changes will provide some relief to these households, there will still be pensioners unable to afford the high cost of energy and living in cold damp homes.
“So now the Government must focus on how it supports all households in fuel poverty and implements the long term measures needed to bring down the cost of energy for good. This includes full investment in the Warm Homes Plan to improve energy efficiency of homes and market reforms to bring down the price households pay for electricity.”
Plaid Cymru’s Westminster Leader, Liz Saville Roberts MP said: “Targeting the most vulnerable is never the right approach. Labour’s decision to cut Winter Fuel Payments last year left millions of pensioners facing real hardship and uncertainty. These are people who deserve security, not neglect.
“While Reeves’ U-turn is welcome, it’s clear that it was driven by polling, not principle. If the most vulnerable people were a true priority for Labour, they wouldn’t need public pressure to act and these cuts would never have been made in the first place.
“If this UK Government wants to deliver its promise of change, it must also go further and reverse the cruel cuts to welfare, including to PIP payments. Anything less will show this Government is more interested in headlines than helping those who need it most.”
