Tens of thousands of older people face a financial cliff-edge because of changes to the Winter Fuel Payment, new analysis has revealed.

Chancellor Rachel Reeves announced last week that the state benefit, designed to help pensioners with their heating bills, would no longer be universal.

In England and Wales, only pensioners on means-tested benefits like Pension Credit will qualify for the financial support, meaning about 10m people will no longer be eligible.

But Policy in Practice estimated there are also 130,000 pensioners who will miss out because they are just £500 over the income threshold for receiving Pension Credit.

The data analytics company said they could now be better off if they had a lower income because they would be able to receive both Pension Credit and the Winter Fuel Payment.

A further 850,000 older people will miss out on the support for heating bills because they are eligible for but not claiming Pension Credit, the firm said.

Policy in Practice founder Deven Ghelani said: ‘Taking the Winter Fuel Payment from better off pensioners is one of the few reasonable ways to save money in social security, particularly as they benefit from the triple lock.

‘However, there really is no excuse for the shockingly low levels of Pension Credit take up as many older people continue to struggle with the cost of living.’

Mr Ghelani urged the Government to make the benefit system simpler and promote proactive support.