Finance Minister Rachel Reeves announced a series of measures on Monday to close a £22 billion budget deficit which she says has been “covered up” by the Conservative government.
These include the sudden removal of winter fuel payments for millions of pensioners and the long-overdue removal of caps on social security payments.
What is the winter fuel fee?
Winter fuel allowance is a state benefit for pensioners designed to help ease the burden of heating bills. It was introduced by the previous Labour government in 1997 and is available to everyone of state pension age in the UK (and some other countries).
The payment ranges from £100 to £300 (tax-free) and the basic amount is paid automatically to everyone who claims a state pension. People who receive other benefits, such as pension credit, can get higher amounts.
The payments are made every winter. In the winter of 2022-23, payments were made to 11.4 million pensioners in 8.4 million households. In that year and in the winter of 2023-24, additional living expenses payments were made to the poorest pensioner households, with some households seeing their payments increased to £600.
What is the Prime Minister doing?
Reeves announced that the benefit would not be uniform across England and Wales, and that only means-tested pensioners would be eligible for it this winter, meaning around 10 million people would lose access to the benefit. Benefits are devolved, meaning Scotland and Northern Ireland would set their own rules.
Mr Reeves said the Government would continue to provide winter fuel grants worth £200 to households on pension credit and £300 to those on pension credit with someone aged 80 or over.
One criticism of the previous system was that it went to people who didn’t need it. At one time, foreign residents in Spain were given the money despite warmer temperatures, but this was abolished 10 years ago. Some wealthy people give the money to charity each year or refuse to accept it.
But charities say the cuts go too far. Age UK said two million people who need benefits will no longer receive them. Nearly half are eligible for pension credit but have not claimed it, and around half earn less than £50 a week above the poverty line – they are not eligible for the extra payment but rely on it. Another group is made up of people who are unwell or live in poorly insulated homes who have to turn the heating up high.
Who will qualify this winter?
The payment is available to households who are over state pension age and receive any of the following benefits:
The basic benefit will be £200, with households with someone over 80 receiving £300.
How can I ensure I get paid?
The only way to qualify for the Winter Fuel Subsidy is if you fall into one of the above categories, so check to see if you qualify. Website Entitled To There are benefit calculators that can tell you if you have anything to claim.
The key will be pension payments, with around 800,000 people not receiving the pensions they are entitled to.
What is Pension Credit?
The pension credit is aimed at those on low incomes and already provides a range of benefits, including the cold weather allowance (worth £25 for every seven days of extremely cold weather between early November and the end of March).
The allowance ensures single people earn at least £218.15 a week and pensioner couples earn at least £332 a week. People with caring responsibilities or a disability could be eligible for even higher amounts.
How can I get a pension deduction?
If you’re on a low income (less than the guaranteed £218.15 a week), you should check whether you qualify. The government Online calculator Alternatively, call us on 0800 99 1234.
Reeves said the government would combine the administration of pension credit and housing benefit “as soon as is operationally possible” to ensure pensioners who receive housing benefit get the pension credit they are entitled to.
What are the changes to social services?
The proposed reforms would have put a cap on the amount people in England would pay for social care – the help they need at home or in a care home. The cap would have been set at £86,000, after which local authorities would have to foot the bill.
Eligibility criteria have also been changed to make more people eligible for support – currently people with savings of more than £23,500 cannot apply for help from the City – but this is set to increase to £100,000.
The changes were due to be introduced in October 2025 but were cancelled.
