Winter fuel payment U-turn in place this year, says chancellor

Changes to the winter fuel payment to allow more people to receive it will be in place this year, the chancellor has said.

Rachel Reeves said more people would qualify for the allowance "this winter", however details of the changes and who will be eligible remain unclear.

Prime Minister Sir Keir Starmer has said he wanted to widen the threshold for winter fuel in a U-turn on one of his government's first major policies, but failed to confirm on Wednesday how many would now get it.

The payment, worth up to £300 to help with energy bills during the coldest months, was paid only to those on pension credit last year, but the policy was widely blamed for Labour's poor local election results.

In response to growing questions over the changes, Downing Street said it would provide "clarity" on how it would expand payments "as soon as we can".

Caroline Abrahams, charity director at Age UK, said: "We are encouraged by the chancellor's words, but will wait to see the detail, which needs to be published very soon if changes are to be made in time for this winter, something that is absolutely crucial if we're to protect the pensioners at greatest risk."

Earlier on Wednesday, pensions minister Torsten Bell said there would be no return to the previous system in which the payment was made to all 11.4 million pensioners.

"It's not a good idea that we have a system paying a few hundreds of pounds to millionaires, and so we're not going to be continuing with that," he said.

The government has not provided details of who would qualify as a millionaire.

Sir Keir told Parliament that the reason the government could expand the number of people receiving the payment was because Labour had "stabilised the economy".

Reeves said the economy was now in a "better shape," and that the government "had listened to the concerns people had about the level of the means test" in a speech in Greater Manchester announcing billions of pounds of investment in transport infrastructure in England.

But Daisy Cooper, treasury spokesperson for the Liberal Democrats, said pensioners deserved an apology from the government.

"This whole debacle has caused needless misery for millions of pensioners," she said.

The decision to means-test the previously universal payment was one of the first announcements by the chancellor after Labour's landslide election victory last year.

The practicalities of changing the system again are complicated. One option would be a system in which people on certain incomes can make a claim.

Clawing back a payment via the tax system for those on higher incomes is another possibility.

The government has yet to outline which mechanics it intends to use to enact its change of policy.

In Scotland, ministers have already outlined a different policy. Those in receipt of qualifying benefits like pension credit would get the payment as before, while others would get £100.

The funds - which are limited to one payment per household - will be paid through a new Scottish Parliament benefit, which will not be ready until late 2025.