New means-test for Winter Fuel Payments risks creating fresh complexity for little fiscal reward 9 June 2025 Commenting on the Government plan announced today (Monday) to means-test Winter Fuel Payments (WFPs) from this winter with a threshold of £35,000, Alex Clegg, Economist at the Resolution Foundation, said: “The new scheme for means-testing Winter Fuel Payments means that that the number of pensioners receiving support will rise from 1.3 million last winter to around 9 million this winter, and not far off the 11.6 million who received Winter Fuel Payments two winters ago when they were universal. “But this U-turn doesn’t represent a return to the status quo. The new means-test will create new complexity in the tax system, including a cliff-edge for those with around £35,000 of income. The reported savings of £450 million will be reduced further by the cost of increased pension credit take-up as a result of the original policy, and the cost of administering the new means-test. “The real question is why it is now a priority to pay Winter Fuel Payments to over three quarters of pensioners, with almost half of the new beneficiaries in the richest half of the population, when previously it was judged that only one-in-ten needed support.” Notes to Editors According to DWP caseload data, in 2023-24 around 11.6 million pensioners received WFPs at a cost of around £2.2 billion. Last winter (2024-25), around 1.3 million pensioners received WFPs at a cost of around £300 million. Next winter (2025-26), under these plans, around 9 million pensioners will receive WFPs at a cost of around £1.6 billion. The new scheme is only marginally progressive, with 57 per cent pensioners gaining from the new policy in the bottom half of the income distribution, and the remaining 43 per cent in the top half.
