ReutersThe United Kingdom is set to make winter fuel payments to millions of older people during the 2025 winter season. This decision comes on Monday, June 9, as a major U-turn of unpopular cuts after months of political pressure on Prime Minister Keir Starmer.
After assuming office in July 2024, Starmer's Labour government cut winter fuel payments for all but the poorest pensioners in England and Wales as part of wider spending reductions.
The government made the move, stating that they were necessary to fix a hole in the public finances left by the previous Conservative administration. The move was reversed on Monday, June 9.
It will restore those payments to 9 million pensioners, excluding only 2 million who earn above 35,000 pounds ($47,495) from the 200-300 pounds subsidy for heating bills in the colder months, as reported by news agency Reuters.
Speaking about the decision to reverse last year’s move, Reeves stated that it was right to continue excluding wealthier pensioners from the payment and that last year's "difficult decisions" had been justified.
"Because of those decisions, our public finances are now in a better position, which means that this year we're able to pay the winter fuel payment to more pensioners," she told reporters.
How much u-turn will cost UK govt
The U-turn is set to cost the government 1.25 billion pounds ($1.69 billion), and means-testing of the payment will save around 450 million pounds. According to the Treasury, the move would not lead to permanent additional borrowing, with funding details to be set out at a budget later in 2025.
Starmer signaled last month that he would reverse the cuts. The cuts had meant that around 85% of pensioner households that received the payments lost the benefit, according to the Institute for Fiscal Studies think tank.
After assuming office in July 2024, Starmer's Labour government cut winter fuel payments for all but the poorest pensioners in England and Wales as part of wider spending reductions.
The government made the move, stating that they were necessary to fix a hole in the public finances left by the previous Conservative administration. The move was reversed on Monday, June 9.
It will restore those payments to 9 million pensioners, excluding only 2 million who earn above 35,000 pounds ($47,495) from the 200-300 pounds subsidy for heating bills in the colder months, as reported by news agency Reuters.
Speaking about the decision to reverse last year’s move, Reeves stated that it was right to continue excluding wealthier pensioners from the payment and that last year's "difficult decisions" had been justified.
"Because of those decisions, our public finances are now in a better position, which means that this year we're able to pay the winter fuel payment to more pensioners," she told reporters.
How much u-turn will cost UK govt
The U-turn is set to cost the government 1.25 billion pounds ($1.69 billion), and means-testing of the payment will save around 450 million pounds. According to the Treasury, the move would not lead to permanent additional borrowing, with funding details to be set out at a budget later in 2025.Starmer signaled last month that he would reverse the cuts. The cuts had meant that around 85% of pensioner households that received the payments lost the benefit, according to the Institute for Fiscal Studies think tank.
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