The government has confirmed that Winter Fuel Payments will return for the 2025-26 season, providing much-needed support for pensioners facing rising energy bills. This marks a reversal of last year’s controversial decision to suspend the payments and reflects growing concern over the impact of winter costs on older households.
The scheme will apply to all individuals who reach State Pension age by the qualifying week, which runs from 15 to 21 September 2025. Pensioners with annual income of £35,000 or less will receive the full Winter Fuel Payment automatically. The standard payment is £200 per household, rising to £300 for households where one or more residents are aged 80 or over.
Those with income above £35,000 will still receive the payment initially, but the amount will be reclaimed through the PAYE system or Self-Assessment. There will also be an option for higher earners to opt out of receiving the payment altogether.
Around nine million pensioners are expected to qualify under the revised scheme. The cost to the Exchequer is estimated at £1.25 billion, though the means-testing element is expected to save around £450 million when compared to the previously universal model.
The government has described the decision as a fair and responsible approach, striking a balance between offering meaningful help to those most in need while limiting costs at a time of budget constraints. The policy has also been shaped by public pressure and advocacy from pensioners’ organisations who raised concerns following last year’s cuts.
Further details about how the scheme will operate, including how individuals can opt out or confirm their eligibility, will be released later in the summer. The Winter Fuel Payment will continue to be managed by the Department for Work and Pensions and paid out automatically to eligible individuals.
For pensioners and their families, this is welcome news ahead of what could be another expensive winter. For advisers and accountants, this is a useful moment to check clients’ entitlements and ensure they are aware of the available support.
If you work with older clients or those approaching retirement, now is the time to prepare for discussions about eligibility, tax implications for higher earners, and the benefits of opting in or out. The Autumn Budget is expected to confirm the funding arrangements in full.