Labour to reverse winter fuel payment cuts - who will be eligible and what happens next?

Independent

21-05-2025

Sir Keir Starmer has announced a major U-turn on his controversial cuts to winter fuel payments after mounting backlash from his own MPs and a devastating performance at the local elections.
In July, the chancellor announced that pensioners not in receipt of pension credits or other means tested benefits would no longer receive winter fuel payments - a £300 payment to help with energy costs in the colder months.
But asked about the policy at prime minister's questions on Wednesday, Sir Keir announced that he wants to ensure more pensioners are eligible – something he claimed has come as a result of an improving economic picture.
But after spending months ruling out a U-turn, it looks likely that the decision has come as a result of intense political pressure amid poor approval ratings and the threat of rebellion from Labour backbenchers.
Who is eligible for winter fuel allowance?
Currently, those aged over 66 in receipt of pension credits or other means tested benefits are eligible for the payment - amounting to an income threshold of £11,500.
In winter 2024/25, around 1.5m pensioners received the payment – a massive drop from the 10.8m pensioners who received it the year before.
What was the controversy around the cuts?
The cuts were deeply unpopular because they were seen as being disproportionately damaging to vulnerable people, and were criticised for leaving thousands of poorer pensions who were on the borderline missing out on the payment.
In November, it was revealed that the government's own figures indicated the cuts would force 100,000 pensioners into poverty in 2026.
The policy was partly blamed for Labour's poor performance at the local elections – which saw them lose two-thirds of the council seats they had in 2021– as well as the previously Labour-held Runcorn and Helsby parliamentary seat to Reform UK.
There is also a growing sentiment among Labour MPs that the winter fuel cuts, combined with the £5bn welfare cuts and the party's decision to keep the two child benefit cap in place, has created an image of Labour as being the new 'nasty party'.
What has Keir Starmer said about reversing the cuts?
The prime minister and his chancellor Rachel Reeves have spent months denying that they are planning changes to the policy in the face of growing pressure on them to do so.
Earlier this month, Sir Keir's official spokesperson defended the decision to introduce means testing for the payment as a difficult but necessary step to fix the economy.
"The policy is set out. There will not be a change to the government policy, which set out the difficult decision we had to take to ensure economic stability, repair the public finances following the £22bn blackhole left by the previous government', Downing Street said.
But addressing the Commons on Wednesday, Sir Keir said he recognises that 'people are still feeling the pressure of the cost-of-living crisis including pensioners'.
'As the economy improves, we want to make sure people feel those improvements in their days as their lives go forward. That is why we want to ensure that as we go forward more pensioners are eligible for winter fuel payments', he said.
Who will be now be eligible and what is the timeframe?
The policy is very thin on detail, with no indication of who might be eligible under the changes. It is likely to involve a change to the £11,500 threshold at which people become eligible for the payment. However, it is not yet known how much this could be increased by.
There has also been limited information on when the changes will come into force, with Downing Street leaving the door open to many pensioners facing another winter without the payment.
It is understood that the detail of the policy will be presented at the October budget, however the PM's spokesperson would not be drawn on whether the changes would come into force by this winter.