More than three-quarters of pensioners will receive the winter fuel payment this year following a U-turn decision by Rachel Reeves.
The chancellor has restored payments to all pensioners with an income of less than £35,000, which totals nine million people.
Under the new policy, all pensioners will get payments automatically of £200, or £300 for the over-80s. These will then be taken back through the tax system for higher earners.
However, Reeves is now facing questions about where she will find the £1.25billion needed to fund the winter fuel payments. According to ministers, the policy will save £450million compared to universal winter fuel payments, but the saving is expected to be around £200million less this winter.
The chancellor acknowledged that there was “still work to do to ensure that the sums add up”, promising to give details of how the policy will be funded at the autumn budget."
She said: “No one should be in any doubt about my commitment to the fiscal rules to ensure that the sums always add up.”
Sir Keir Starmer and Rachel Reeves insisted that the change was affordable because "the economy is improving."
But, Paul Johnson, director of the economics think tank the Institute for Fiscal Studies, said this “flies in the face of reality” after the Office for Budget Responsibility downgraded growth forecasts in March, with a “significant risk” they will do so again in the autumn.
Johnson said: “The fiscal situation is clearly less good now than it was last summer. If they are saying this means there will not be any additional borrowing then it follows that this will mean the equivalent of an additional amount of tax.”