More than 100,000 pensioners are set to lose their winter fuel payment next year due to increases in state and private pensions pushing their income above the frozen £35,000 threshold, according to new analysis from LCP.
The winter fuel payment, worth up to £300, is currently available to retirees with an annual income below £35,000. However, with the state pension expected to rise by 4.7% in April 2026 in line with wage growth, and many company pensions increasing by an assumed 4% in line with inflation, a significant number of pensioners will exceed the threshold.
Steve Webb, former pensions minister and partner at LCP, warned that the frozen threshold will progressively affect more people. “Given that inflation-linked increases are simply designed to maintain people’s standard of living, it is hard to see why they should be treated as making people ‘better off’ and hence less deserving of a winter fuel payment,” he said. The analysis suggests that up to half a million pensioners could lose the payment over the next four years if the threshold remains unchanged.
The winter fuel payment has been a contentious political issue. It was means-tested by Labour in 2024, restored in 2025 for those with income under £35,000 following backlash, but now faces further erosion due to frozen thresholds. Pensions minister Torsten Bell confirmed in June 2025 that there are no plans to adjust the £35,000 limit.
For the 2025-26 winter, the payment will be extended to all eligible pensioners in England, Wales, and Northern Ireland, but those with income over £35,000 will have to repay it through their tax code or self-assessment. Reversing the cut would cost £1.25bn, raising concerns about potential tax rises or spending cuts.
