PENSIONERS should lose universal benefits and millions of workers receive a tax cut in this month's Budget, according to Tory MPs.

The Tory Free Enterprise Group also called on the Chancellor George Osborne to consider scrapping ringfenced funding for areas including overseas aid.

There should be no "sacred cows" in the penultimate Budget before the 2015 General Election, the group's convenor Tory MP Kwasi Kwarteng said.

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The group of Conservative backbenchers are concerned that so-called "strivers" may start to feel hard done by after years of austerity.

They want a rise in the threshold before workers start to pay the 40p tax rate.

More than 4 million people currently pay the rate - twice as many as 20 years ago.

But the group also warn that the UK must continue to cut public spending, or face a future burdened by national debt like countries such as Italy.

Before the last election David Cameron pledged to protect universal pensioner benefits including the Winter Fuel Allowance.

But his commitment only binds him until the end of this parliament.

Labour has already said that it will look at some pensioner benefits if it is elected in 2015.

Some Labour MPs argue that it cannot be right for millionaires to get a free TV licence.

But opponents believe that means testing the benefits will cost more money in the long run.

In a briefing in Westminster Mr Kwarteng said: "We are going to have to look at focusing welfare spending on those who need it most.

"I think that issues regarding the Winter Fuel Allowance will have to be looked at, I suppose in the next Parliament, whichever party gets in.

"We are going to have to be quite courageous on that because otherwise the future awaiting for us is essentially that of Italy or a Mediterranean country where they have huge debts and they live with this burden of debt seemingly in perpetuity and that's not something that we want to happen to Britain."

He added: "The idea of ringfencing departments needs to be looked at. If you look at fiscal consolidation anywhere in the world, even in people's own budgets, if you are trying to reduce expenditure you will try to reduce expenditure across the piece."

He also said that he had heard of people using their winter fuel allowance to heat an indoor swimming pool.

The MP for Spelthorne added: "Right across the county I represent and the constituency I represent people are getting winter fuel allowance and I don't think they need it and, in more candid moments, they themselves say 'we don't need this'."