Pension credit for the poorest elderly people on a small pension will see an increase of £5 from April to £260 a year for a single person and by £7.65 to £397 per year for a couple, it has been reported.

In yesterday's pre-Budget report, chancellor of the exchequer Alistair Darling stated that and additional £200 million will be spent next year to provide pensioners with free peak and off-peak national bus travel, the Telegraph reports.

Mr Darling also announced that the social care budget - which provides councils with funds to help pay for services that allow older people stay in their own homes such as meals on wheels and home helps - will rise to £1.4 billion by 2010, according to the publication.

Age Concern director general Gordon Lishman said that it was "extremely disappointing" that the chancellor had elected not to bring forward the date for re-linking the state pension to earnings.