Pensioner Bill Jupp, 69, welcomed the £5-a-week increase for single OAPs and £8 for couples.

But he said: "Long term, the state pension will wither on the vine. It will go up by more than inflation this year and next year, but then it will be pegged to inflation.

"Since 1948, the value of the state pension has declined from 18.8 per cent of average earnings to less than 15 per cent.

"We ought to be improving on the 1948 level. Then, we were absolutely broke as a country - now we are sitting on £900bn.

"Pensioners should be able to share in the wealth."

Mr Jupp, who campaigns for better pensions with the Transport and General Workers Union retired members' association, said the increase in tax allowances would not affect most pensioners because very few paid tax.

He said: "I am pleased that they are helping the NHS and schools, and I am all for helping out the younger generation with the cost of bringing up children, but I feel that they are missing the boat on pensions."

Mr Jupp, of Arlington Drive, Marston, added: "The younger generation will be worse off than us - and ours is bad enough. If any generation has earned a proper pension it is this one."