The government’s Household Support Fund – designed to help with cost of living pressures like fuel prices – could be extended.
Under the scheme, which had been due to close on 30 September, cash is provided to councils in England to give struggling households small payments.
The BBC has been told the Treasury is looking at extending the fund amid criticism of the decision to scrap winter fuel payments for 10 million pensioners in England and Wales.
The government is facing pressure to rethink the fuel payment cuts but government sources have said the prime minister is standing firm.
It comes as Sir Keir Starmer warned the coming autumn Budget would be “painful” and that the government would have to make “big asks” of the public.
Speaking from Downing Street, he said he had not wanted to means-test winter fuel payments but that “it was a choice we had to take”.
Since coming to power in July, Sir Keir’s government has accused its Conservative predecessor of leaving public finances in a bad state and has repeatedly warned that “tough decisions” will need to be taken.
Conservative shadow chancellor Jeremy Hunt has hit back at the argument, saying Labour inherited a “growing and resilient economy”.
The Household Support Fund was introduced in October 2021, with initial funding of £500m to help people hit by the Covid pandemic.
It has since been extended several times, most recently in the spring Budget when the previous government provided a further £500m to extend the fund through to September.
Councils can use the money to help people afford their food, energy and water bills as well as other essential items.
The scheme is aimed at vulnerable people but individual councils can decide on their own eligibility criteria and how the money is spent.
The pot of money also includes cash for devolved administrations in Wales, Scotland and Northern Ireland to spend as they choose.
Paul Kissack, of the Joseph Rowntree Foundation, said extending the fund would be “the right thing to do” but added that there needed to be a “proper plan to address hardship, with a social security system that does what it is meant to do – helping people to afford the essentials”.