Winter fuel U-turn marks big concession to grey vote
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Nine million state pensioners in England and Wales with an income up to £35,000 a year will receive winter fuel payments this winter, as Labour’s early decision to means-test the previously universal benefit is blamed for its losses in recent local elections.
The decision to pay a universal benefit to people over state pension age with incomes up to £35,000 – roughly average earnings – is a significant climbdown by a government whose election campaign centred on helping “working people”, after more than a decade of stagnating real wages and rising child poverty.
The Treasury said the change will cost around £1.25bn in England and Wales, around £450m less than giving it to all state pensioners, subject to certification by the Office for Budget Responsibility, and will not lead to permanent additional borrowing.
“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,” said chancellor Rachel Reeves.
“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.”
The embarrassing U-turn follows recent local elections in which the Reform party made significant gains, reportedly because voters were angry over the decision to limit winter fuel payment worth up to £300 to those on pension credit.
The decision to exclude only about 2m state pensioners with incomes of £35,000 or more means more than three-quarters of pensioners in England and Wales will get the payment. Pensioners above this threshold will have the payment automatically recovered via HM Revenue and Customs, and have the ability to opt out, with details on how to do this yet to be confirmed.
