How to claim winter fuel allowance after Labour U-turn

9 June 2025, 15:10 | Updated: 9 June 2025, 15:11

Around nine million pensioners in England and Wales will now receive the winter fuel payment this year after the government U-turned on a controversial cut.

Chancellor Rachel Reeves announced a reversal of the £1.25bn policy on Monday which means that eight million who were set to miss out will now benefit from the aid.

Ministers have insisted no additional Government borrowing will be needed to cover the costs of the reversal, prompting warnings of tax rises on the horizon.

Labour has been praised by organisations representing the elderly, while critics have accused them of merely reacting to growing pressure from Reform.

Here is what it means.

Read also: There are no quick fixes for Labour - the only answer is to hold tight, says Andrew Marr

What has the government done?

The decision to limit the winter fuel payment to only those who claimed pension credit was one of Labour’s first acts in Government.

The controversial decision was aimed at balancing what was described as a £22 billion “black hole” in the public finances.

This policy was set to potentially see eight million pensioners lose their access to the helping hand but on Monday the government said most of those who lost access will now receive it.

It is expected to cost £1.25bn to reinstate the payments - but the Treasury haven't yet said how it will be paid for.

Ms 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 mean-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 [more than] three quarters of pensioners receiving the payment in England and Wales later this winter.”

How much is the winter fuel payment?

The payment of £200 per household, or £300 per household where there is someone over 80, is made automatically in a lump sum at the beginning of winter.

It is given to those with an income of below £35,000. This threshold is above the income level of pensioners in poverty and is broadly in line with average earnings, balancing support for lower income pensioners with fairness to the taxpayer, the government has said.

Who is eligible for the payment and how to claim.

To be eligible for the winter fuel allowance, a person will need to have reached the state pension age of 66 by the week starting September 15 this year.

“You do not need to do anything - payments will be made automatically,” the government states.

It means around two million pensioners who are earning over the threshold will still not get the payment. Pensioners are also able to opt-out if they do not require it.

HMRC will not try to recover winter fuel payments from people who have died.

Why has Labour made this U-turn?

Ms Reeves has said the government took this action after it “listened to people’s concerns” and said that it is now possible to do after the economy improved.

The Chancellor told broadcasters: “From this winter, nine million pensioners will now receive winter fuel payments. It will still be means-tested, but at a higher level, we’ve listened to people’s concerns around the level of the means test.

“Because of changes we’ve made and the stability we’ve brought back to the economy, we are able to increase that amount.”

Ms Reeves has reiterated that the government “inherited a £22m black hole from the Tories,” and has said that the UK has the fastest growing economy in the G7. She added that it is of paramount importance that the “sums add up”.

Labour has made the move after widespread backlash to the initial policy and the party has lost ground to Reform in polls - despite winning last week’s Hamilton byelection.

Downing Street insisted its policy of raising the threshold for winter fuel payments was different from Reform’s policy of reinstating the benefit, which it had previously said was “unfunded”.

Jon Greer, head of retirement policy at wealth manager Quilter, said: “This U-turn underlines how politically and practically difficult it is to unpick long-standing universal benefits like the winter fuel payment.”

Ms Reeves has declined to apologise to pensioners.