Chancellor Rachel Reeves (Image: -)
More than nine million pensioners are to receive Winter Fuel Payments this year after Chancellor Rachel Reeves confirmed details of a massive u-turn. Anyone with an income of ￡35,000 or below will benefit from the payments of up to ￡300 designed to help them stay warm in freezing weather.
It means the overwhelming majority of those who lost the money will become eligible again, at a cost of ￡1.25 billion in England and Wales, following an Express crusade demanding the allowance is reinstated. 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 means-test this payment so that it is targeted and fair, rather than restoring eligibility to everyone including the wealthiest.
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“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 over three quarters of pensioners receiving the payment in England and Wales later this winter.”
More than three quarters of pensioners will now be eligible for funding. Technically, the payment will be restored to every pensioner but the money will be recovered through the tax system for those with earnings of ￡35,000 or more, around 1.8 million pensioners.
The decision was described as a "humiliating u-turn" by Conservative leader Kemi Badenoch. It was welcomed by Labour MP Rachael Maskell, one of the most outspoken Labour MPs opposing the means-testing policy, but she warned that "more needs to be done to ensure that older people don't face fuel poverty this winter."
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The Chancellor provoked a storm of protest when she robbed ten million pensioners of winter fuel payments last year. She announced it would be means-tested so that only those eligible for Pension Credit, which meant they were on very low incomes, would usually be eligible.
Charities and Labour MPs warned that many older people would face a choice between eating and heating their homes, and the Express launched a campaign demanding the payments be reinstated.
The decision to limit the winter fuel payment to only those who claimed pension credit was one of Labour’s first acts in Government, aimed at balancing what was described as a ￡22 billion “black hole” in the public finances.
Prime Minister Sir Keir Starmer last month bowed to pressure and announced the rules would change, but without giving details. Ms Reeves has now revealed exactly how that will happen- and crucially, she confirmed that pensioners will get the money this winter.
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Pensioners do not need to fill in any forms or take any further action as they will automatically receive the payment this winter. For those with incomes above the threshold, around two million pensioners, the money will be automatically recovered via HM Revenue and Customs, the tax office.
Payments of ￡200 per household, or ￡300 per household where there is someone over 80, will be made automatically this winter and wealthier households will repay the money through the taxes automatically taken from their salaries, known as PAYE, or via a Self-Assessment return if they complete one.
No one will need to register with HMRC just for the winter fuel payment, the Government says. Pensioners who want to opt out voluntarily and not receive the payment at all will be able to do so, with details to be confirmed.
The means-testing that does still exist will save around ￡450 million compared to the original system, when cash simply went to everyone of state pension age.
Dennis Reed, Director of Silver Voices, who has led the campaign to restore the winter fuel payment to all pensioners said: "This is fantastic news for older people in the UK. The most important aspect of the U-turn is that the payment will be sent automatically to all pensioners, without the need to put in a claim, making sure it will reach everyone who struggled last winter."
Kemi Badenoch, Leader of the Opposition, said: “Keir Starmer has scrambled to clear up a mess of his own making. I repeatedly challenged him to reverse his callous decision to withdraw winter fuel payments, and every time Starmer arrogantly dismissed my criticisms.
“This humiliating u-turn will come as scant comfort to the pensioners forced to choose between heating and eating last winter. The Prime Minister should now apologise for his terrible judgement.”
Labour MP Rachael Maskell said: "Having campaigned so hard for Government to restore the Winter Fuel Payments I am pleased that this winter the payments will be restored to the majority of pensioners, and all who have an income of less than ￡35,000.
"This is the right decision to protect people from the cold, however since its removal was first announced, energy bills have risen by ￡281, so it is clear that more needs to be done to ensure that older people don't face fuel poverty this winter."
Sally Tsoukaris, spokesperson for Later Life Ambitions, said: “We are pleased to see that the Government is rethinking its decision to strip over 10 million pensioners of their winter fuel payments.
"This is a critical step in ensuring that those in later life across the UK do not face another cold winter of financial uncertainty and struggle.
"The needs of pensioners must not be ignored, and it is essential that this announcement is built upon to further renew the confidence of older people in this government."
Liberal Democrat Leader Ed Davey said: "Finally the Chancellor has listened to the Liberal Democrats and the tireless campaigners in realising how disastrous this policy was, but the misery it has caused cannot be overstated.
"Countless pensioners were forced to choose between heating and eating all whilst the Government buried its head in the sand for months on end, ignoring those who were really suffering.
"We will now study the detail of this proposal closely to make sure those who need support actually get that support. The pain they went through this winter cannot be for nothing."
Dr Carole Easton OBE, Chief Executive at the Centre for Ageing Better, said: “The government is right to revisit the eligibility of winter fuel payments.
“It was always clear that setting the Pension Credit eligibility as the threshold of support was too low and would put the health of millions of low-income pensioners at risk.
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“We hope that the government’s revised approach will strike the right balance in terms of the nation’s finances while also ensuring that the support is available to those who need it."
Independent Age Chief Executive, Joanna Elson CBE said: "We are pleased that the UK Government has listened to the voices of older people on a low income and reconsidered what was an incredibly damaging change to the Winter Fuel Payment. By widening the eligibility criteria, more older people in financial hardship will now receive this vital lifeline in time for winter.
"Our helpline receives thousands of calls from older people making drastic cutbacks just to get by and the changes to the Winter Fuel Payment made this worse. For millions living on low incomes, the entitlement supports them to turn their heating on and stock up on food during the colder months."