Chancellor Alistair Darling said in his Budget speech that he “wanted to do more to help older people especially this year” with regard to pensions.

He said the Government is spending £11bn more in real terms per year on pensions with over half this extra money going to pensioners on the lowest incomes.

From this April, as a result of changes made last year, a further 600,000 pensioners will be taken out of paying income tax. The pension credit now guarantees a minimum income of £124 per week from April.

Darling also confirmed that changes to Individual Savings Accounts (ISAs) would take effect from 6 April.

He said: “There are now over 17 million people with ISAs and, from this April, we are increasing the annual investment limit to £7,200 with the amount that can be held in cash rising to £3,600.”