Labour makes U-turn on winter fuel payments with nine million pensioners to benefit

The Government has reversed its controversial decision to scrap the winter fuel payment for pensioners and nine million people over the State Pension age will see it reinstated this winter.

In an announcement at midday today (Monday, June 9) the Government said everyone over the State Pension age in England and Wales with an income of, or below, £35,000 a year will receive the payment.

It said it means no ‘lower or middle-income’ pensioners will miss out, with the vast majority – more than three quarters – benefiting.

This change will cost around £1.25billion 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 (OBR) compared to the previous system where everyone received it regardless.

People do not need to do anything and all those eligible will automatically receive the payment this winter and for those with incomes above the threshold it will be automatically recovered via HMRC.

The payment of £200 per household, or £300 per household where there is someone aged over 80, will be made automatically. The Government said more than 12 million pensioners across the UK will also benefit from the Triple Lock, with their State Pension set to increase by up to £1,900 during this parliament.

Chancellor Rachel Reeves received widespread criticism including form Labour MPs when she originally scrapped the Winter Fuel Payment, but she said today: “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.”

North Devon financial adviser and wealth manager Philip Milton said removing the payment had been ‘a seriously clumsy and politically stupid move for Labour to have made and it will pay the price for that’.

He added: “It was made to ‘save money’ and has ended-up not only alienating voters but costing the country far more than the old benefit ever cost.

“It would be better to make it universal to all pensioners, but make it taxable, with tax coding adjustments so it is free to non-tax payers.

“Then introduce a special ‘supertax’ rate for those paying tax at the 45% rate, for such special benefits (eg 60%) and make other pensioner benefits universal but taxable, for example bus passes, prescriptions and TV licences, which of course those in need would not pay for.

“The result would be no new system, saving civil servants and colossal assessment work, no patronising annual means-testing benefit application to prove or disprove eligibility and the wealthiest pay most of it back.”

North Devon MP Ian Roome said: “Finally the Chancellor has listened to the Liberal Democrats and the tireless campaigners and realised how disastrous this policy was. This is of course welcome news, but this turnaround should have happened a long time ago.

“We were fortunate in North Devon that our Lib Dem-run North Devon Council stepped in where the Government had abandoned pensioners. They condemned the planned cuts early on and made sure pensioners received some support through emergency grants. But it should never have come to that.

“For months, so many pensioners were left in limbo, filled with worry, while the government looked the other way. Now that this change has been made, we’ll be watching the details closely to make sure those who need support actually get that support.”