Former chancellor Rachel Reeves signed her political death warrant when she scrapped the Winter Fuel Payment for all but the poorest pensioners.
Pensioners will need all the help they can get this winter (Image: Getty)
Reeves was forced to reverse her shock decision to restrict it to those on means-tested benefit Pension Credit, in just one of the many humiliating U-turns she became famous for. Now it’s being restored for the large majority of pensioners. New DWP figures show 10.9 million people received the payment in winter 2025/26, up from just 1.3 million the previous year when eligibility was restricted.
However, around 2.2 million pensioners with incomes above £35,000 had their payments recovered through the tax system, meaning they didn’t receive any cash benefit. And it will be the same story this year too. Ian Futcher, financial planner at Quilter, said: “Winter Fuel Payment statistics also out today show just how dramatic the government’s U-turn proved to be.”
The latest rules mean most pensioners of state pension age in England and Wales qualify, regardless of income. For the upcoming winter of 2026/27, the payment is £200 for someone aged under 80 and £300 for those aged 80 or over, although the exact amount can depend on household circumstances. The payment is usually made automatically in November or December. Letters confirming the sum are due in October or November. But there’s a big catch for higher-income pensioners.
Anyone whose total individual income is above £35,000 has to repay the full Winter Fuel Payment. This isn’t done by sending the money back. HMRC normally collects it by changing the person’s tax code, increasing the tax deducted from their pension or other income. Four groups aren’t eligible at all.
For pensioners who complete a self-assessment tax return, the Winter Fuel Payment charge is normally added to their tax bill instead.
The £35,000 limit applies to each person individually, so a partner’s income isn’t counted. But it’s an all-or-nothing rule. Someone with income of £35,000 or less keeps the payment, while someone with income of £35,001 or more has to repay the full amount through the tax system.
Futcher said Quilter research among more than 5,000 retirees found 22% had changed their financial plans because of Winter Fuel Payment changes. “Our research also shows the average retiree spends £1,744 a year on energy bills, meaning support with those costs can still make a meaningful difference.”
The original cut did have one positive effect, Futcher said, as more pensioners who were entitled to Pension Credit came forward to claim it.
Pensioners should also remember that Pension Credit can provide much more valuable support than Winter Fuel Payment alone, so anyone on a low income should check whether they qualify.
The pressure on pensioners isn’t going to ease. The Ofgem energy price cap will rise by 4% from October 1, lifting it to £1,723 a year for a typical dual-fuel household paying by direct debit. That’s a £60 rise from today’s £1,663. Cornwall Insight forecasts a further £149 increase to £1,872 from January. As gas and electricity bills rise, they’ll need all the help they can get.