Prime Minister Sir Keir Starmer has said “the sooner” his government provides clarity on changes to the winter fuel payment “the better”.
Speaking to the BBC’s Today programme, he reiterated that ministers were reviewing which pensioners should receive the payment but added he wanted to be “absolutely clear where the money is coming from” before setting out the details.
After coming to power in July last year, the Labour government announced it was withdrawing the annual payment – worth up to £300 – from more than 10 million pensioners.
However, last month Sir Keir said he would be partially reversing that decision, making changes to allow “more pensioners” to qualify again.
The government is yet to spell out which pensioners will regain their entitlement to the money, although Treasury Minister Darren Jones has said millionaires should not be getting “subsidy for their energy bills” and that payments would be “targeted to those that need it the most”.
An announcement could come at the Budget in the autumn or even as early as next week when Chancellor Rachel Reeves delivers her Spending Review.
Asked if he still believed his government had been right to restrict winter fuel payments last summer, Sir Keir said he had inherited an economy that was “completely broken”.
“It was our duty to stabilise the economy and to fill in that £22bn black hole. I’m not going to resile from that.”
His U-turn came after pressure from some Labour MPs, who are also expressing concern about the two-child benefit cap and proposed cuts to disability benefits.
Pressed on whether he would consider increasing taxes to raise more money, the prime minister said the UK’s underlying problem in recent years had been “flat or anaemic growth”.
“I don’t think you can tax yourself to growth – we have got high taxes as it is.”
Reform UK, the Liberal Democrats and the Green Party have called for the winter fuel payments to be restored to all pensioners.
Conservative leader Kemi Badenoch has said “millionaire” pensioners should not be eligible.
Previously, the winter fuel payment had been paid to all pensioners regardless of income or wealth. Households with a pensioner under 80 received an annual lump sum of £200, rising to £300 for pensioners over 80.
On taking office, Labour restricted the payment to those pensioners who qualify for pension credit and other income-related benefits – a move which saved an estimated £1.4bn.
The income threshold for pension credit, the main benefit to qualify to continue to receive winter fuel payments, is currently £11,800 a year for individuals and £18,023 for pensioner couples.
Designing a new way of increasing the number of eligible pensioners is likely to be tricky for the government.
The Institute for Fiscal Studies (IFS) said creating a new means-test would create “hassle” for pensioners and result in many not claiming the payment.
Another think tank, the Resolution Foundation, has estimated that expanding the threshold pension credit by 10% could cost £2.5bn.
