Winter Fuel Payment from 2025/26

Winter Fuel Payment is an annual, lump-sum payment for older people in England, Wales and Northern Ireland. The equivalent benefit in Scotland is Pension Age Winter Heating Payment (PAWHP).

Before winter 2024/25, payments had been made on a universal basis to all people of State Pension age. In July 2024, the incoming Labour government announced that pensioners in England and Wales would no longer be entitled unless they received Pension Credit or certain other means-tested benefits, reducing the proportion of pensioners entitled to around 13%. The same approach was then taken in Scotland and Northern Ireland.

This means-testing policy was criticised by opposition parties and many campaigning organisations. The 2024/25 changes are explored in the Library’s briefing Changes to Winter Fuel Payment eligibility rules in 2024/25.

In June 2025, the government announced that from winter 2025/26 onwards all people over State Pension age would again be eligible for Winter Fuel Payment, but that individuals with incomes above £35,000 a year would have to pay it back through the tax system – the Winter Fuel Payments Charge. This means that over three quarters of pensioners will benefit. Devolved administrations in Northern Ireland and Scotland have followed this policy.

What is the Winter Fuel Payment?

Winter Fuel Payment is intended to give older people reassurance they can afford to heat their homes in winter. It is paid to people who have reached State Pension age on or before the end of the qualifying week (the week beginning the third Monday of September each year) and meet certain other entitlement conditions, such as not being in receipt of free treatment in hospital for more than a year.

Most payments are made automatically in November or December.

First introduced in 1997, Winter Fuel Payment amounts have varied, but in most years the amount has been £200 for households where the oldest person is under 80, and £300 for households with someone aged 80 or over. In some years, extra amounts have been paid on top of the standard payments.

Winter Fuel Payment in England, Wales and Northern Ireland is not uprated annually to take account of inflation. From 2025/26, Pension Age Winter Heating Payment in Scotland is uprated, so rates are slightly higher: £203.40 per eligible household where the oldest person is under 80, and £305.10 for households containing a person aged 80 or over.

The Winter Fuel Payments Charge

If a person’s individual taxable income is over £35,000 for the relevant tax year, and they are not also in receipt of a means-tested benefit, HM Revenue and Customs (HMRC) will recoup their Winter Fuel Payment (or PAWHP) via the tax system. This Winter Fuel Payments Charge applies across the UK.

The Charge is applied to individuals, rather than households. This means that where only one partner in a couple has taxable income over £35,000, only that partner’s share will be recovered. The other partner will keep their payment.

The Charge is applied either through a change to pay as you earn (PAYE) tax codes, or by adding the amount to self assessment tax returns.

People can check on gov.uk if their income is over the threshold and how HMRC will take it back.

People can opt out of getting the Winter Fuel Payment or PAWHP if they don’t want to receive it. Once someone has opted out, they will not receive payments in future years unless they opt back in.

Statistics

Across the UK in 2025/26, around 10.2 million people were expected to benefit from Winter Fuel Payment or PAWHP schemes. Around 12.3 million people in the UK were expected to receive payments and roughly 2.2 million are forecast to have incomes above £35,000, so would have any payment withdrawn through the Winter Fuel Payments Charge.

This compares to around 1.5 million people who received payments in 2024/25, when eligibility was linked to receipt of means-tested benefits.

Expenditure

Compared to the previous policy linking entitlement to means-tested benefits, the policy from 2025/26 onwards is expected to cost between £1.3 and £1.4 billion more on average each year.

However, the UK Government estimated that, compared to universal provision of Winter Fuel Payment, withdrawing support through the Winter Fuel Payments Charge would save around £450 million a year. However, analysis suggests that these savings may be largely offset by greater spending due to the increased number of Pension Credit awards made in the year following the previous announcements that eligibility would be linked to means-tested benefits.

Commentary on the 2025/26 changes

The government said it had “listened to concerns about the level of the means-test” and argued that the 2025/26 changes would extend eligibility to the vast majority of pensioners, with over three quarters benefitting. It said the £35,000 threshold is well above the income level of pensioners in poverty and is broadly in line with average earnings, meaning those on lower and middle incomes will still receive the help they need, “balancing support for lower income pensioners with fairness to the taxpayer.”

The Shadow Secretary of State for Work and Pensions, Helen Whately, described the new policy as a “humiliating climbdown”. She criticised the original means-testing policy as a “choice” which increased pensioner poverty. She also criticised the new approach on the grounds it would favour households with one high income member over couples both with incomes just above the threshold, and said it would lead to more people having to report their income for tax purposes through self assessment.

Charities for older people and campaigning groups generally welcomed the 2025/26 changes. For example, Age UK said they were “delighted” everyone over State Pension age with an income of £35,000 or less would benefit.

By contrast, Joseph Dinnage, writing for the pro-market CapX website supported the previous means-testing arrangements and characterised the 2025/26 changes as taking from younger workers to give to give to relatively wealthier older people.

The Institute for Government criticised the government for first failing to lay the groundwork for means-testing support in 2024/25, then for “pretending [that expanding eligibility] is a cost-free choice because the economy is improving”.

Think tanks such as the Resolution Foundation raised concerns that a £35,000 “cliff edge” would add complexity to the tax system. The Institute for Fiscal Studies also raised practical considerations about allowing people to opt out of Winter Fuel Payment, and whether the £35,000 threshold would be increased in future to take account of inflation.