Winter Fuel Payment: Labour restores 2025 allowance to millions of pensioners, eligibility - how much is it?

• The Winter Fuel Payment will be reinstated for around 9 million pensioners in England and Wales
• Reversal follows criticism of Labour’s earlier decision to cut eligibility
• Pensioners earning under £35,000 will get it automatically; others will repay through tax
• Payment remains means-tested, but with a higher income threshold than last winter
• Scotland and Northern Ireland to receive extra funding to match the new rules

The Government has reversed its decision to drastically cut the Winter Fuel Payment, meaning around nine million pensioners in England and Wales will receive the support this winter — a sharp rise from just 1.5 million last year.

The Winter Fuel Payment is a tax-free payment of up to £300 to help older people with heating costs during the winter.

As one of its first decisions, the Labour Government cut eligibility, restricting payments only to pensioners receiving Pension Credit, in a move aimed at plugging a £22 billion gap in the public finances. This reduced the number of recipients by almost 10 million.

In a £1.25 billion U-turn, Chancellor Rachel Reeves has said she will reinstate the payment to most pensioners who previously received it. This follows widespread criticism and political pressure, including poor results for Labour in the local elections.

Who is eligible for the Winter Fuel Payment?

Although millions more will now receive the payment, it is still means-tested — just at a higher income threshold than last winter. Reeves said: “I don’t think it is right that the very richest pensioners have their fuel bills subsidised.”

• Pensioners with an income below £35,000 a year will receive the Winter Fuel Payment automatically
• Pensioners with an income over £35,000 a year will also receive it, but it will be reclaimed through tax later
• You must have reached state pension age by the week starting 15 September 2025

The devolved governments in Scotland and Northern Ireland will also receive additional funding so they can match the new eligibility criteria in their nations too.

Pensioners who don’t wish to receive the payment can choose to opt out, according to the Treasury.

The Treasury says the U-turn won’t involve extra Government borrowing, but fiscal experts have warned it may require tax rises or cuts elsewhere. The Chancellor has promised to explain the funding in the Autumn Budget.

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