Energy bill discounts of £150 will be extended to another 2.7 million households to help with fuel costs this winter.
It brings the number of households eligible for the Warm Home Discount up to just over 6 million, including 900,000 families with children, the Department for Energy Security and Net Zero (DESNZ) said.
The changes mean every bill payer on means-tested benefits will qualify, removing the high-cost-to-heat threshold in the current regulations.
It follows a government consultation on expanding the one-off payment to more people struggling with fuel poverty.
Prime Minister Keir Starmer said: “I know families are still struggling with the cost of living, and I know the fear that comes with not being able to afford your next bill.
“Providing security and peace of mind for working people is deeply personal to me as prime minister and foundational for the Plan for Change.
“I have no doubt that, like rolling out free school meals, breakfast clubs and childcare support, extending this £150 energy bills support to millions more families will make a real difference.”
The Conservatives criticised the move, saying the announcement will only cut bills for a quarter of households.
Andrew Bowie, the acting shadow energy secretary, criticised Labour’s green energy drive, claiming that it would increase bills for most people.
“Kemi Badenoch and I have been clear that net zero by 2050 is impossible without bankrupting Britain and making hard-working families worse off,” he said.
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Typical yearly energy bills are expected to fall by £129 from July, Ofgem has said.
However typical bills under the July to September 2025 price cap will still be 42% higher than in winter 2021/22, according to a House of Commons research briefing.
The Warm Home Discount scheme was introduced by the coalition government in 2011 to help people on low incomes with their fuel bills.
Adam Scorer, the chief executive of National Energy Action, said today’s announcement is “hugely positive news” but is “far from sturdy”.
“The rebate has only increased by a meagre £10 during a period in which energy bills have gone up by £500 a year and there is no clarity on the programme beyond the end of March next year,” he said.
“This announcement is good news for this winter, but the government needs to come up with a longer-term plan for providing deeper support in future for people who cannot afford a warm and healthy home.”