DWP confirms group that won’t have £300 winter fuel payment restored under new rules

After a hugely unpopular decision to strip universal payments and start means-testing pensioners last year, the government has confirmed more people will get support this winter – here is everything you need to know

Millions of people will get a winter fuel payment this year in a major government U-turn (Image: WalesOnline/Rob Browne )

Millions of people will get a winter fuel payment this year in a major government U-turn. Pensioners with an income of £35,000 or below will get the payment worth up to £300 later this year, it was confirmed on Monday.

The announcement partly reverses a controversial policy introduced last year to start means-testing the winter fuel payment, which slashed the number of pensioners receiving the support from 11.4 million to around 1.5 million. The payment, usually sent out in November or December to help with fuel costs during the colder months, had previously been automatic and the change was widely blamed for the Labour Party’s collapse in public support following its general election victory.

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In a partial U-turn the government had earlier this year confirmed more people would receive the payment but had not provided further details until now. Under the changes around nine million people will now qualify for the payment at a cost of £1.25bn, which is expected to be recouped through recovering the payment from higher-income pensioners via HMRC.

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Here are the changes you need to know about and who will qualify for the changes under the new rules. For money-saving tips, sign up to our Money newsletter here

What are the current rules for the winter fuel payment and what changed in 2024/25?

Previously, winter fuel payments were universal and paid out to everyone over the state pension age. However, after its election victory last year the new Labour-led UK government announced it would start means-testing the payments to restrict them to those on benefits and pension credit in an effort to save money.

The decision was widely criticised as targeting some of the most vulnerable and was said to have had an impact on the party’s disastrous local elections performance.

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In recent weeks the government confirmed a partial U-turn on its policy with Chancellor Rachel Reeves confirming that more pensioners will receive the winter fuel allowance this year but payments would not be universal.

Ms Reeves told reporters at a press conference that “more people will get winter fuel payment this winter”, adding that further details will be announced “as soon as we possibly can.”

What is changing now under the new rule?

The changes, officially announced on Monday, June 9, will see all pensioners in England and Wales with an income of or below £35,000 a year receive a winter fuel payment. This extends eligibility to the vast majority of pensioners, with around nine million or over three quarters benefitting, ministers said on Monday.

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This change will cost around £1.25 billion in England and Wales and see means-testing of the Winter Fuel Payment save around £450 million, subject to certification by the Office for Budget Responsibility compared to the system of universal winter fuel payments. The costs will be accounted for at the Budget and incorporated into the next OBR forecast.

Addressing potential questions about how the change will be funded, the government said it would “take decisions on funding in the round at that forecast to ensure the government’s non-negotiable fiscal rules are met”, adding that it would “not lead to permanent additional borrowing.”

You won’t need to take any action as you will automatically receive the payment this winter if you qualify. If your income is above the threshold the money will be automatically recovered via HMRC. The payment of £200 per household, or £300 per household where there is someone over 80, will be made automatically this winter. Over 12 million pensioners across the United Kingdom will also benefit from the Triple Lock, with their State Pension set to increase by up to £1,900 this parliament.

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Chancellor of the Exchequer Rachel 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.

“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.”

Pensioners above the £35,000 threshold – around two million people in England and Wales – will have the full amount of the winter fuel payment they received automatically collected via PAYE or via their self-assessment return. No one will need to register with HMRC for this or take any further action. Pensioners who want to opt out and not receive the payment at all will be able to do so, with details to be confirmed.

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Up to 400 jobs are at risk after a bus manufacturer announced plans to move operations to England.

Alexander Dennis, which has factories in Falkirk and Larbert, has said it is considering moving manufacturing to a site in Scarborough.

The plans would see work at the Falkirk site discontinued, while the Larbert site would be closed after current contracts are completed.

The company said it was facing strong competition from Chinese electric bus manufacturers whose share of the market had risen from 10% to 35%.

Chancellor Rachel Reeves has unveiled the contents of the UK’s first multi-year spending review since 2021.

The review sets the day-to-day budgets of government departments over the next three years, used to pay staff and deliver public services.

It also sets their investment budgets until the end of the decade, to pay for new infrastructure such as hospitals, schools, and military kit.

Here is a summary of the key points.

If you work in the public sector your job or your pay could be directly affected.

The defence sector and the NHS are getting a significant amount of government funding. Science and tech will see investment; other areas much less so.

Over the next three years, Home Office funding is down 1.7% a year, the Foreign Office loses 6.9% a year, mainly in aid spending, the Department for Transport loses 5% a year, Environment and Rural Affairs loses 2.7%, and Business and Trade loses 1.8%.

Some of these cuts are tied to specific savings, but it could also mean a squeeze on jobs and wages in those sectors.

Chancellor Rachel Reeves has also announced some long-term projects, which will create new jobs in time. For example, giving the go-ahead to the new Sizewell C nuclear plant will create 10,000 direct jobs and thousands more in connected businesses, ministers say.

‘Incoherent’ to claim spending plans will require tax rises, says Treasury minister

Darren Jones, the chief secretary to the Treasury, was deeply involved in the spending review and is defending the money that was dished out.

Asked about the claim from opposition parties that the spending will require tax rises in the future, Jones says this argument is “incoherent”.

“This spending review is allocating the money that we have already raised,” he says.

The money had been brought in at the budget last year and the spring statement this year, he claims.

He says the opposition needs to “go back and do some more homework” if that is the argument they’re coming up with.

Jones insists that everyone in cabinet has “got a good settlement” – although it’s not a case of everyone getting “an equal slice of the pie” as some budgets are bigger than others.

A Labour DOGE?

One phrase deployed by Jones was a “zero-based review” – the process of the government going through the whole of their accounts to see what is being spent where.

Jones says that this hasn’t been done for 18 years.

He adds that all the money found to save – by selling buildings, cutting consultants and not sending physical letters – has been reallocated.

Asked if this was the equivalent of Elon Musk’s Department of Government Efficiency (DOGE), Jones says: “I’m not entirely clear what DOGE is, but if it was an assessment of how are we spending money, and can we spend it better? Then yes.

“If it was a case of breaking into government offices and cancelling people’s IT access? No.”