Chancellor Gordon Brown has promised a package of measures to make one million pensioners �1,000 a year better off by next April, than when Labour came to power.

His raft of measures for older people included increased tax allowances, a wider net for income support, free TV licences for those over 75 and higher winter fuel payments.

This Budget still forces pensioners to make ends meet on a 75p pension increase

Age Concern

Pensioners' groups welcomed the initiatives but criticised the chancellor for not boosting the state pension to help the poorest over-65s.

Tax allowances were increased to �5,790 and to �6,050 for over-75s with immediate effect, meaning six million pensioners will not pay tax.

Mr Brown doubled to �6,000 the amount pensioners are allowed to have as savings for income support calculations from next April.

In addition, he said that the cut-off point for income support, which had been frozen at �8,000, will be raised to �12,000.

"As a result 500,000 elderly people, previously penalised for their thrift and savings, would be on average �250 a year better off, many better off by �1,000 a year," he said.

Fuel allowance upped

The Chancellor added that Social Security Secretary Alistair Darling is to launch consultation on a new "pensioners' credit" and the winter fuel allowance would be raised from �100 to �150 from this year.

Cheaper and more energy efficient central heating will be made available for pensioners and those on low incomes through the new "affordable warmth programme".

Mr Brown also confirmed that from 1 November all pensioners over 75 will receive a free TV licence and announced that anyone over that age with an unexpired licence running beyond that date will be eligible for a refund.

The minimum income guarantee will be increased in line with earnings next year.

For a single pensioner it will be worth �82 a week and for pensioners over 80 it will be �90 a week. For a couple it will be worth �127 a week.

The Chancellor said "of all the measures to lift our poorest pensioners out of poverty, the minimum income guarantee is the most essential".

But Age Concern's Sally Greengross said: "This Budget still forces pensioners to make ends meet on a 75p pension increase this year.

"Ultimately the poorest pensioners need a major increase in the basic state pension so they are not forced to rely on benefits."

Help the Aged's Mervyn Cohler also drew attention to this year's "miserly" pension increase and said: "All these measures still highlight the dependency of older people and do not encourage independence."

Dr Gary Kitchen, of the National Pensioners' Convention, said the Budget should have restored the link between the state pension and earnings.

"The longer the Government take to introduce a significant increase in the state pension the more pensioners will be left feeling angry and betrayed," he added.