A form of cost of living support, which was due to end in September, has been extended through April 2025.
The Household Support Fund aims to help struggling households in England with bills and essentials.
It was due to expire in September but will run for another six months in what the Government described as a multimillion-pound “boost” for local authorities.
Campaigners and charities welcomed the news although some warned it is the “bare minimum” needed and that it “puts a plaster on poverty”.
The Department for Work and Pensions (DWP) said the £421 million extension provides certainty to councils across England through to April 2025.
An estimated £79 million will be given to devolved administrations via the Barnett formula, with governments in Scotland, Wales and Northern Ireland being able to choose how to distribute the additional funding, the department said.
The confirmation of the Household Support Fund extension comes after the condemnation of the Labour Government for axing winter fuel payments for millions of pensioners.
Chancellor Rachel Reeves and Prime Minister Sir Keir Starmer have faced criticism from opponents, campaigners and some of their own MPs over the decision to means-test the payments worth up to £300.
Commons Leader Lucy Powell said the UK could have faced a run on the pound and an economic crash if Ms Reeves had not axed the payments to fill a black hole in the public finances.
DWP has said pensioners and others struggling to heat their homes or afford other essential items should contact their local council to see what support may be available to them, with details on the latest funding via the Household Support Fund to be set out in the coming weeks.
The Government said the fund can be used by councils to go beyond emergency support, including working with local charities and community groups to provide residents with key appliances, school uniforms, cookery classes, and items to improve energy efficiency in the home.
Ms Reeves, said: “The £22 billion blackhole inherited from the previous governments means we have to take tough decisions to fix the foundations of our economy.
“But extending the Household Support Fund is the right thing to do – provide targeted support for those who need it most as we head into the winter months.”
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