Winter Fuel Payments are expected to be reinstated in some form as soon as next week with analysts suggesting "clawing back" funding for the energy bill benefit through taxes.
Last year, Chancellor Rachel Reeves confirmed eligibility for the up to £300 in energy support, which was previously universal would now be means-tested.
As of today, older households now need to be in receipt of Pension Credit, a benefit reserved for those on low incomes, to claim the allowance.
Both Reeves and Prime Minister Keir Starmer have hinted a partial reversal of the Winter Fuel Payment's means-testing is on the cards with the expectation eligibility criteria will be expanded.
Analysts are suggesting Labour "claw back" tax money to pay for a partial reversal of Winter Fuel Payment means-testing
GETTYHowever, the Government has ruled out reinstating universal Winter Fuel Payments for all pensioners, Pensions Minister Torsten Bell confirmed to the Work and Pensions Committee today.
Bell told MPs that details of the expanded eligibility criteria would be announced to the House of Commons, fuelling speculation about next week's Spending Review.
The announcement is widely expected to come during the Government's Spending Review on 11 June 2025, according to industry speculation.
If not next week, it is expected the U-turn will be confirmed in the upcoming Autumn Budget, with the timing allowing pensioners to know their eligibility status well before winter arrives.
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Labour pension minister Torsten Bell has ruled out a complete reversal of Winter Fuel Payment means-testing
GETTYTom Selby, the director of public policy at AJ Bell, outlined the dilemma facing Labour and what action could be taken to generate funding
Selby said: "After months of political pressure, the Government finally accepted it needed to look again at the decision to limit the Winter Fuel Payment to Pension Credit recipients. But it now faces a dilemma in determining exactly who should be eligible.
Applications for Pension Credit have surged by 51 per cent since the July 2024 announcement compared to the same period in 2023-24, according to Government data from May 2025.
One option being considered is awarding the payment to all state pension recipients, then clawing money back from higher-income households through tax returns.
"This might look something like the process for clawing back child benefit for working households, although that has caused mass confusion among taxpayers bamboozled by the complexity of the rules," Selby added.
Analysts warn the Government faces significant challenges in designing a system that expands eligibility without creating administrative complexity.
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Pension Credit can be claimed by phone, online or by post ALAMYSelby warned: "It's no surprise Torsten Bell has ruled out a complete U-turn to revert back to paying the Winter Fuel Payment to every pensioner, as that would cost this financially hampered government too much money and loss of face."
For those considering Pension Credit claims, individuals living alone with weekly income below £227.10 (approximately £11,800 annually) qualify for support.
Couples with income under £346.60 weekly (around £18,000 annually) are also eligible.
The benefit tops up income to these thresholds but requires active claiming through the DWP online or by phone. Many eligible pensioners historically haven't claimed, unaware of their entitlement.
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