What Keir Starmer's winter fuel payment U-turn means for you

Sir Keir Starmer has made a partial U-turn on limiting the winter fuel payment – but is facing questions over whether it can be made in time for next winter.

The Prime Minister said yesterday that 'as the economy improves' he wanted to look at widening eligibility for the payments worth up to £300.

Officials have so far been unable to say how many more pensioners would be eligible or if the policy will be altered in time for winter later this year.

MailOnline has now looked at some of the key questions surrounding the change, and several options for how the Government could go about implementing it:

What is the winter fuel payment?

The winter fuel payment was originally introduced in 1997 by Labour as a universal payment for all pensioners to help pay their heating bills in the colder months.

But last year after being elected, the Government controversially restricted the payment to those who qualify for pension credit and other income-related benefits.

For the most recent winter, the means-tested payment was for those born before September 23, 1958. Those aged under 80 got £200, while over-80s received £300.

People who qualified through receiving certain benefits would have got a letter last autumn saying how much they would have received in winter 2024/25.

Sir Keir Starmer makes the announcement about the Government's partial U-turn on the winter fuel allowance during Prime Minister's Questions in the House of Commons yesterday

What has happened now?

Sir Keir Starmer has now signalled a partial U-turn over the Government's decision to strip winter fuel payments from millions of pensioners.

The Prime Minister said yesterday that 'as the economy improves' he wanted to look at widening eligibility for the payments worth up to £300.

Who will be eligible and when?

The Prime Minister is facing questions about whether the change can be made in time to help pensioners through winter later this year.

The Government has not yet set out how the change to who is entitled to the payments worth up to £300 will look.

Officials have been unable to say how many more pensioners would be eligible or if the policy would be altered in time for this winter.

Sir Keir suggested further details will come at a 'fiscal event', likely to be the next budget in the autumn.

The Times suggested pensioners could have to wait for more than a year to have the payment reinstated, citing Government sources worried about ageing computer systems.

Unite protest on Westminster Bridge in January over the decision to means-test the allowance

Why are Labour making the change?

The decision to means-test the previously universal payment was one of the first announcements by Chancellor Rachel Reeves after Labour's landslide election victory last year and has been widely blamed for the party's collapse in support.

It was an issue which Labour campaigners were challenged about on the doorsteps during May's elections which saw the party lose councillors and the Runcorn and Helsby parliamentary by-election.

The Government insisted the policy was necessary to help stabilise the public finances, allowing the improvements in the economic picture which Sir Keir said could result in the partial reversal of the measure.

But Sir Keir said he understood 'that people are still feeling the pressure of the cost-of-living crisis, including pensioners' as he made the announcement at Prime Minister's Questions.

Meanwhile a memo leaked to The Daily Telegraph suggested Deputy Prime Minister Angela Rayner pushed for a radical combination of tax hikes to avoid the need for further cuts in spending.

What's the political reaction been?

Mrs Badenoch has written to the Prime Minister demanding to know whether the reversal would 'come into effect in time for payments to be made for this winter', given a budget could be 'six months away'.

Rachael Maskell, the Labour MP for York Central MP who has been outspoken about the decision, welcomed the movement from the Government.

But she said pensioners will still lose out as the deadline to apply for pension credit - which could govern eligibility for the payment - is likely to fall around the same time as the budget.

More than 11million pensioners were receiving the winter fuel allowance before it was changed

Could this affect any other benefits?

The move could open the door for ministers to back down on an overhaul of disability benefits, which has seen a large number of Labour MPs threaten to rebel.

So far, senior ministers have been resolute that they will go ahead with the plans.

Ministers are also said to be considering scrapping the two-child benefit cap to win over Labour MPs, though Downing Street has insisted such a move would not be a 'silver bullet' for ending child poverty.

What would a full reversal look like?

One option for implementing the new plan would be a full reversal of the decision to strip the benefit from millions of pensioners.

The decision to make it available only to those who claim pension credit last year meant those claiming winter fuel payment fell by almost 90 per cent and saved around £1.5billion a year, the Institute for Fiscal Studies estimates.

Undoing last year's policy change would make some 11million more households eligible and of course wipe out the £1.5billion in savings.

Could there be a specific threshold?

Creating a new threshold and means test would allow households not on pension credit to apply directly for winter fuel payments.

Raising it 20 per cent above the pension credit threshold would cost around £100million and see winter fuel payments go to around 400,000 more families, according to the Resolution Foundation.

One option would be to model this on child benefit by allowing all pensioner households to claim but then require those above a certain income level to pay some back via a self assessment tax return, the IFS notes.

But there is a risk to adopting 'a clunky bureaucratic mechanism for what is, ultimately, a relatively small payment', IFS associate director Tom Waters warned.

Expand it to those on disability or housing benefits?

Some 1.8million more households could get winter fuel payment at a cost of around £500million per year if entitlement is extended to those on disability benefits, the IFS estimates.

This would be more complicated to put in place in Scotland, where disability benefit is devolved.

Extending eligibility to include those on housing and disability benefits would give support to 1.3million more pensioner families at a cost of £300million a year, the Resolution Foundation estimates.

This would be an 'affordable' and 'sensible way forward', chief executive Ruth Curtice said.

Will the money be paid to individuals instead?

One difficulty in allocating the winter fuel payment is that it currently goes to households rather than individuals.

Changing this would mean the Government could do a means test on an individual basis and use information that it already records for income tax purposes.

It would see pensioners with a low income but with a high-income spouse get the winter fuel payment.

However, it could also see couples get twice as much winter fuel payment as single people, where at the moment a single person would get the same amount as a couple sharing a household.

How about not giving it to the rich?

One option is that the payment could go to all pensioners except those who pay the 40p tax rate, restoring it to around nine million people.

Former Labour prime minister Gordon Brown - who as chancellor introduced the universal winter fuel payment - suggested the richest pensioners could still not receive it.

'I think there is a case, for example, for people on the top rate of tax not receiving it, but that's something the Government has got to decide,' he told Sky News.

What are campaigners saying?

Age UK's charity director Caroline Abrahams welcomed the Prime Minister's commitment to change the winter fuel policy but said 'the devil is always in the detail and we postpone judgment until we hear more'.

Last winter saw 'very significant numbers of older people too frightened to turn on their heating when it was cold', she said, adding 'if nothing changes, next winter threatens to be just as bad'.

Unite union boss Sharon Graham called for the winter fuel allowance to be restored in full, adding: 'Pensioners' minds need to be put at rest now, rather than dangling a promise to make a move in the autumn.'