More than three-quarters of pensioners will receive the winter fuel payment this year after Chancellor Rachel Reeves confirmed a major policy U-turn.
Nine million pensioners in England and Wales with an annual income of £35,000 or less will now be eligible.
The payment, worth up to £300 to help with energy bills during the coldest months, was paid only to those on pension credit last year.
The policy was widely blamed for Labour's poor local election results. Reeves said the government had "listened to people's concerns", but Conservative leader Kemi Badenoch called the change a "humiliating U-turn".
The reversal comes ahead of the government's Spending Review, details of which will be announced on Wednesday.
The government said the increased winter fuel payment threshold meant "no lower or middle-income pensioners will miss out".
"It will still be means-tested but at a higher level," Reeves said.
"Because of changes we've made and the stability we've brought back to the economy, we are able to increase that amount."
- How much is the winter fuel payment and who will get it?
The chancellor said she would set out how the £1.25bn policy would be paid for in the autumn Budget, but added she would stick to her self-imposed borrowing rules.
The government has argued that as the economy is improving, it has more room to increase eligibility for the payments. It has said the policy change will "not lead to permanent additional borrowing".
However, while economic growth was better than expected in the first quarter of the year, most analysts expect it to slow in the months ahead.
The Treasury has said the change will not lead to permanent additional borrowing, but Paul Johnson of the Institute for Fiscal Studies said this implied "it will lead to permanent additional taxes (or just possibly permanent cuts to other bits of welfare)".