Labour has insisted it will not reverse cuts to the Winter Fuel Payment, despite renewed calls for a rethink on the policy.
There had been speculation of a U-turn, or a softening of the cuts to the Winter Fuel Payment, after Health Secretary Wes Streeting said ministers were "reflecting on what the voters told us" at last week's local elections in England.
Labour lost about two-thirds of the council seats it was defending.
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The Guardian also reported that the government was considering raising the effective £11,500 earnings threshold to continue qualifying for the payment.
However, Keir Starmer's spokesman says there "will not be a change to the government's policy".
He added that last year's move to restrict eligibility for the Winter Fuel Payment was required to "ensure economic stability and repair the public finances".
Plans to cut the Winter Fuel Allowance were announced by chancellor Rachel Reeves last July, when she delivered her spending audit and revealed a £22 billion shortfall in the public finances. Previously a universal benefit, pensioners now only qualify for the payment if they receive Pension Credit or another means-tested benefit.
It means about nine million pensioners no longer qualify for the Winter Fuel Payment. The benefit is worth £200 a year for pensioners under 80, increasing to £300 for over-80s, paid in November or December.
“Public fury” over the Winter Fuel Payment
Axing the Winter Fuel Payment for all pensioners was seen as a key issue at last week's local elections, at which Labour lost 187 council seats and control of the only council it was defending.
Reform UK made big gains, winning 677 of around 1,600 seats contested, and seizing control of eight authorities from the Conservatives.
Labour MP and former cabinet minister Louise Haigh has hit out at the winter fuel cuts, saying they had become a "totemic" issue for many voters.
She argues that winter fuel and proposed benefits cuts were "primary examples offered as to why the Labour government simply did not look like it understood their priorities".
Labour Welsh First Minister Baroness Eluned Morgan has also called on the UK government to "rethink" the policy, adding it "comes up time and again" with voters.
Meanwhile, Liberal Democrat Treasury spokesperson Daisy Cooper said following Streeting’s comments that Labour would need to reflect on the poor local election results: “The government’s cuts to Winter Fuel Payments have caused untold misery, with countless pensioners forced to choose between heating and eating.
“It beggars belief that the government is only now waking up to the public fury and damage they have caused.”
Responding to the government saying there will be no change to the cuts to Winter Fuel Payments, Cooper slammed it as a “completely tone deaf response to the local elections”.
Could we see a judicial review?
Charities and unions have also opposed the change to the Winter Fuel Allowance.
Caroline Abrahams, charity director at Age UK, comments: “The decision to slash eligibility for Winter Fuel Payment last July caused huge anxiety and distress among our older population in the winter just past, some of whom were so worried about their fuel bills that they chose to keep their heating off, even when it was freezing.
“Being chronically cold is a health risk for older people, especially if they have underlying health conditions, so this was potentially disastrous for them and also piled extra pressure on the NHS.”
Unite, one of Labour’s biggest donors, said in November it would take legal action against the government in response to its decision to axe the Winter Fuel Payment for millions of pensioners. The union has made a formal application to the High Court for leave to go forward with a full judicial review.
Unite tells MoneyWeek that the judicial review is ongoing and it is waiting on the court to decide if it can proceed to a full hearing.
The union adds that most of its retired members have small workplace pensions that don’t make them wealthy but put them above the threshold to continue to qualify for the Winter Fuel Payment.
Unite general secretary Sharon Graham said: “The government should never have picked the pocket of pensioners and now needs to reverse this policy to show that it cares about the most vulnerable in society.”
Will Labour perform a U-turn over the Winter Fuel Payment?
While No 10 has insisted there won’t be any changes to the Winter Fuel Payment, there are calls for the government to look at the policy again - in order to give struggling pensioners more financial support and/or to give the Labour party more public support.
Abrahams at Age UK notes: "We hope it's true that the government is focusing attention on how to ensure older people can stay warm at home next winter and into the future.
"There are a number of ways in which they could put more money into the pockets of older people who lost Winter Fuel Payment when they really couldn't afford to do so, one of the most promising of which is to broaden eligibility for the Warm Homes Discount so more pensioners can benefit from it.
“Another option is to give Winter Fuel Payment to more pensioners than only those in receipt of Pension Credit, since the low take-up of that benefit means too many of the poorest and most vulnerable older people in our society are currently missing out on it.”
Only 65% of people entitled to Pension Credit received the benefit in 2022-2023, according to official data.
Rachel Vahey, head of public policy at the investment platform AJ Bell, says that 10 months after the controversial cut to the Winter Fuel Allowance, “the furore still hasn’t died down, instead being fanned by the flames of a shaky Labour showing in the local government elections”.
She adds that it’s unclear what Labour could do in terms of extending the payment to more pensioners as it “would probably prove too administratively expensive”.
Therefore, “it may be the only route is to return to paying a universal benefit to every state pensioner. Such a U-turn would be embarrassing for Labour to stomach but may just save them some valuable public support”, according to Vahey.
Who can claim the Winter Fuel Payment?
The Winter Fuel Payment is an annual tax-free allowance that aims to help pensioners pay their energy bills during the coldest months of the year.
Pensioners have been eligible for some support on energy bills since 1997, but under Labour’s new rules, the support is now means-tested. Households will be eligible for up to £200 if they receive Pension Credit, or £300 if they receive Pension Credit and have a household member aged 80 plus.
Pension Credit is one of the most under-claimed and misunderstood benefits, worth £3,900 a year on average. The benefit essentially tops up your state pension if you are on a low income.
Pension Credit will top you up to £227.10 per week if you are single, or £346.60 if you are a couple. You may get extra amounts if you have other responsibilities and costs.
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