More than 75% of pensioners in England and Wales will receive the winter fuel payment in a major U-turn from Keir Starmer’s government.
Chancellor Rachel Reeves confirmed on Monday that pensioners with an annual income £35,000 or below will now be eligible. This is a total of nine million people.
Last year, more than 10 million people lost their eligibility for the payment when Labour announced they were limiting the allowance to those receiving pension credit or another means-tested benefit.
The policy aimed to help plug what Labour said was a £22bn black hold in the public finances after they came into power last summer.
The BBC reports that reversing the planned cuts means the policy will now cost £1.25bn.
The U-turn marks the end of a messy sage for the government over arguably its most controversial policy.
Ever since the chancellor announced plans to introduce a means-tested cap for the winter fuel payment, which can be worth up to £300, there have been calls for a rethink on the policy.
Pressure grew on Labour to reverse the policy after its poor local election results, with some MPs and councillors blaming the cuts for the party’s performance.
Initially, the government said it would not be reversing the cuts, but the prime minister announced last month that the policy would be eased.
Speaking to reporters on Monday, Reeves said the government has listened to people’s concerns over the cuts. She said eligibility for the winter fuel payment has been able to be widened by the Treasury because of the “stability” the government has brought to the economy.
Details on how the policy change will be funded will be outlined in the autumn budget.
Related: Robert Jenrick has no answer when pushed on Tory winter fuel payments policy