Is there any truth in the rumor the British Embassy is ceasing to issue proof of income letters for retirement extensions.   

Yep there is a thread about it....https://www.thaivisa.com/forum/topic/1061149-british-embassy-bangkok-to-stop-certification-of-income-letters/

There is this topic about it.

This one 

i have just read this also, if true i thought the purpose of an Embassy was to assist tourists and residents, they get 52 quid for doing bugger all at the moment, i dont fancy having 800,000 in my account for 3 months,. maybe be looking elsewhere to live.