More pensioners to get the Winter Fuel Payment

More pensioners in England and Wales will get help with their energy bills this winter, after the government confirmed it will widen access to the Winter Fuel Payment by raising the income threshold to £35,000.

The change, announced as part of the Spending Review, reverses part of last year’s restriction and means around nine million pensioners in England and Wales are now expected to benefit. 

While all state pensioners will receive the payment upfront, those with taxable incomes above the threshold will have the amount automatically recovered through the tax system.

The Scottish Government has also announced that it will apply the same £35,000 income threshold to its Winter Heating Payment from this year. 

The Spending Review sets out how public money will be allocated across departments and services in the coming years. Here, Which? breaks down what’s changing with the Winter Fuel Payment — and what else was announced.

What's changing with the Winter Fuel Payment?

The Winter Fuel Payment is a tax-free annual sum to help pensioners cover energy costs during colder months. It’s typically worth £200 per household, or £300 if someone is aged 80 or over, and is paid automatically between November and January.

Until 2023, it was paid universally to almost all pensioners. But for winter 2024-25, it was restricted to those on income-related benefits such as Pension Credit – narrowing eligibility significantly.

From winter 2025-26, the payment will once again be available to a wider group, using a fixed income threshold to determine eligibility. Pensioners with a taxable income of £35,000 or less will keep the full payment. 

The revised approach is expected to cost £1.25bn but save £450m compared to a universal scheme.

• Find out more: pension credit explained 

Who will qualify?

You’ll qualify if you:

• Have reached state pension age by 21 September 2025 (the qualifying week is 15–21 September)
• Live in England or Wales
• Have a taxable income of £35,000 or less

Taxable income includes the state pension, workplace or personal pensions, earnings, and most interest from savings.

The threshold applies to individuals, not households. If you're in a couple and neither of you receives pension credit, the payment is split. For example, two people under 80 would get £100 each. If only one partner is above the threshold, only their share will be reclaimed.

You won’t need to apply as payments will be automatic.

• Find out more: pensioner perks and benefits 

How repayments will work

If your income is above the threshold, HMRC will automatically recover the payment through your self-assessment tax return or PAYE (Pay As You Earn).  

If you know you’ll exceed the threshold, you’ll be able to opt out to avoid the payment altogether. The Department for Work and Pensions is developing a system to allow this, with details to follow. 

• Find out more: pension tax calculator 

What about Scotland and Northern Ireland?

In Scotland, the Winter Fuel Payment has been replaced by the Pension Age Winter Heating Payment – a tax-free annual payment made automatically to help older people cover energy bills. From winter 2025-26, the Scottish Government will introduce a £35,000 income cap, matching the approach taken in England and Wales.

Pensioners with a taxable income of £35,000 or less will receive £203.40, or £305.10 if they’re aged 80 or over. Those above the threshold won’t receive a payment. 

In Northern Ireland, the Executive has confirmed that the Winter Fuel Payment will be reinstated for winter 2025-26, using the same £35,000 income threshold as in England and Wales. 

Eligible pensioners will receive £200 or £300, depending on their age, with payments made automatically by the Department for Communities once legislation is finalised later this summer.

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What else was announced as part of the Spending Review?

Here's what else the Chancellor Rachel Reeves announced during her Spending Review today (11 June).

Affordable housing funding boost

The Chancellor has confirmed £39bn in funding for a new 10-year Affordable Homes Programme, designed to help tackle the shortage of social and affordable housing across England.

The money will be allocated as grants to local authorities, housing associations and private developers, with the aim of delivering around 1.5 million homes over the next decade.

Social landlords will also be allowed to increase rents by up to one percentage point above CPI inflation, annually.

• Find out more: best mortgage rates 2025

£3 bus fare cap extended

The £3 cap on single bus fares in England has been extended until March 2027. 

Initially launched in January 2023 as a £2 cap, the scheme was later increased to £2.50 and then £3 from January 2025.

The cap applies to most single journeys on participating services outside London. It’s designed to keep fares affordable and support rural and local routes.

Warm Homes Plan confirmed

The Spending Review also confirmed £13.2bn for the Warm Homes Plan, which funds upgrades such as insulation, solar panels and heat pumps. The Treasury estimates it could cut energy bills by up to £600 a year for households. 

The Chancellor also highlighted local rollouts including £30m in Blackpool, £11m in Rugby and £7m in Bradford. Further details are expected by October 2025.

• Find out more: best energy providers 2025

This story has been updated since it was first published on 11 June. The last update was on 19 June detailing Scotland and NI's plans for the payment.