The British government has reversed its decision to limit winter fuel payments for pensioners, following widespread criticism and political pressure. Chancellor Rachel Reeves announced that pensioners with an annual income of £35,000 or below will now be eligible for the payment, which is worth up to £300. The original policy, which limited the benefit to those receiving pension credit or another means-tested benefit, affected approximately nine million people in England and Wales.
The reversal is expected to cost £1.25 billion and will be detailed in the autumn Budget. Labour hopes to move past what many consider its biggest misstep in the first year of its administration.
Today we are expanding Winter Fuel Payments to benefit nine million pensioners this winter.
It is right that we continue to means-test this payment so that it is targeted and fair.
That's why we have acted to expand eligibility so no pensioner on a lower income will miss out.
— Rachel Reeves (@RachelReevesMP) June 9, 2025
The new system of reclaiming benefits through the tax system for higher-earning pensioners mirrors an existing method for parents who receive child benefits, placing additional pressure on HM Revenue and Customs to adapt its systems promptly.
UK charities have reacted positively to the government’s U-turn.
NEWS! Winter Fuel Payment to be reintroduced for all state pensioners but clawed back through tax if you earn £35,000+.
My instant analysis of how it works, what it means and is it an improvement.
(Still working on subtitled version, I will post a link to it in reply to this… pic.twitter.com/NjkFxGbKwN
— Martin Lewis (@MartinSLewis) June 9, 2025
Government expands winter fuel payment eligibility
Joanna Elson, from Independent Age, described the original policy as “incredibly damaging” and welcomed the change, but insisted more must be done to ensure the financial security of older people.
Labour have finally been forced to u-turn on their cruel cuts to the winter fuel allowance for pensioners.
But it was a decision they never should have made.
Never forget. pic.twitter.com/I4HVtgXmrk
— Conservatives (@Conservatives) June 9, 2025
Simon Francis of the End Fuel Poverty Coalition commended Reeves for the policy reversal but urged further support for all households in fuel poverty. Tory leader Kemi Badenoch labeled the U-turn as “humiliating” for Labour, accusing Prime Minister Keir Starmer of ignoring earlier warnings which forced pensioners to choose between heating and eating last winter. Badenoch called for Starmer to apologize.
BREAKING: All pensioners with income of £35,000 or less will have winter fuel payment restored in full.
New threshold means 7.5m pensioners who didn't get it last year now will.
Paid to all pensioners and then clawed back from wealthiest via HMRC as revealed by @guardian
— Pippa Crerar (@PippaCrerar) June 9, 2025
Chancellor Reeves emphasized that the government had listened to pensioners’ concerns, enabling the policy shift due to the “stability” gained in the economy. Further details on funding this policy change will be disclosed in the Autumn Budget, ensuring it remains within fiscal rules. The government is seeking feedback from pensioners, especially those earning more than £35,000, on their views regarding the announcement.
The autumn Budget will reveal specific financial strategies to cover this policy shift.
