Winter Fuel Payment May Return for Most Pensioners Amid Government Policy Shift

Downing Street is reportedly weighing plans to restore the winter fuel payment to the majority of pensioners, reversing last year’s controversial decision to means-test the allowance.

The move comes after mounting public backlash and a renewed pledge from Prime Minister Keir Starmer to ensure “more pensioners are eligible” for the payment. His comments, made during Prime Minister’s Questions this week, follow intense pressure from voters and opposition MPs.

Last year, the Government introduced means testing for the £300 winter fuel allowance, removing it from over 10 million pensioners. The change provoked widespread criticism, particularly among older voters concerned about rising living costs.

According to The Mirror, the decision to review the policy was made just a day before Starmer publicly announced the potential change of course. While No. 10 has indicated that a full reversal is unlikely, officials are said to be exploring ways to restore the benefit to all but the wealthiest pensioners.

One model under consideration would see the payment reinstated for all pensioners and then recouped from higher earners through the tax system. The approach mirrors a strategy used by former Tory Chancellor George Osborne during the Coalition Government, when child benefit was withdrawn from wealthier families via taxation.

Final decisions on how eligibility will be expanded are not expected until the autumn Budget, where further details on the policy shift will be confirmed.

The potential U-turn has sparked broader speculation over the future of other contentious welfare policies. Notably, the Government’s long-awaited child poverty strategy has been delayed until October to coincide with the Budget.

Labour MPs have called on the Government to reconsider the two-child benefit limit, which currently prevents parents from claiming Universal Credit or Child Tax Credits for more than two children.

Education Secretary Bridget Phillipson and Work and Pensions Secretary Liz Kendall are jointly leading the child poverty taskforce and are expected to address the two-child policy in their forthcoming strategy report.

Reports from The Observer suggest the Prime Minister has directed the Treasury to examine the financial implications of lifting the cap—estimated to cost £3.5 billion annually.

Though a final decision has yet to be made, insiders say Starmer is privately committed to tackling child poverty and sees the benefit limit as a significant barrier to progress.

Experts argue that scrapping the two-child cap could lift hundreds of thousands of children out of poverty and significantly improve the living standards of low-income families across the UK.

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StarmerPhotographer: Tolga Akmen/EPA/Bloomberg