The change, announced as part of the Spending Review, reverses part of last year’s restriction and means around nine million pensioners in England and Wales are now expected to benefit.
While all state pensioners will receive the payment up front, those with taxable incomes above the threshold will have the amount automatically recovered through the tax system.
The Spending Review sets out how public money will be allocated across departments and services in the coming years. Here, Which? breaks down what’s changing with the Winter Fuel Payment — and what else was announced.
What's changing with the Winter Fuel Payment?
The Winter Fuel Payment is a tax-free annual sum to help pensioners cover energy costs during colder months. It’s typically worth £200 per household, or £300 if someone is aged 80 or over, and is paid automatically between November and January.
Until 2023, it was paid universally to almost all pensioners. But for winter 2024-25, it was restricted to those on income-related benefits such as Pension Credit – narrowing eligibility significantly.
From winter 2025-26, the payment will once again be available to a wider group, using a fixed income threshold to determine eligibility. Pensioners with a taxable income of £35,000 or less will keep the full payment.
The revised approach is expected to cost £1.25bn but save £450m compared to a universal scheme.
Find out more:Who will qualify?
You’ll qualify if you:
Taxable income includes the state pension, workplace or personal pensions, earnings, and most interest from savings.
The threshold applies to individuals, not households. If you're in a couple and neither of you receives pension credit, the payment is split. For example, two people under 80 would get £100 each. If only one partner is above the threshold, only their share will be reclaimed.
You won’t need to apply as payments will be automatic.
Find out more:How repayments will work
If your income is above the threshold, HMRC will automatically recover the payment through your self-assessment tax return or PAYE (Pay As You Earn).
If you know you’ll exceed the threshold, you’ll be able to opt out to avoid the payment altogether. The Department for Work and Pensions is developing a system to allow this, with details to follow.
Find out moreWhat else was announced as part of the Spending Review?
Here's what else the Chancellor Rachel Reeves announced during her Spending Review today (11 June).
Affordable housing funding boost
The Chancellor has confirmed £39bn in funding for a new 10-year Affordable Homes Programme, designed to help tackle the shortage of social and affordable housing across England.
The money will be allocated as grants to local authorities, housing associations and private developers, with the aim of delivering around 1.5m homes over the next decade.
Social landlords will also be allowed to increase rents by up to one percentage point above CPI inflation annually.
Find out more:£3 bus fare cap extended
The £3 cap on single bus fares in England has been extended until March 2027.
Initially launched in January 2023 as a £2 cap, the scheme was later increased to £2.50 and then £3 from January 2025.
The cap applies to most single journeys on participating services outside London. It’s designed to keep fares affordable and support rural and local routes.
Warm Homes Plan confirmed
The Spending Review also confirmed £13.2bn for the Warm Homes Plan, which funds upgrades such as insulation, solar panels and heat pumps. The Treasury estimates it could cut energy bills by up to £600 a year for households.
The Chancellor also highlighted local rollouts including £30m in Blackpool, £11m in Rugby and £7m in Bradford. Further details are expected by October 2025.
Find out moresource https://www.which.co.uk/news/article/more-pensioners-to-get-the-winter-fuel-payment-a8Lhv4Y2z9Cl