The rising cost of food and fuel, combined with record lows in savings returns and underperforming pensions, mean that people aged 70 and over will suffer a disproportionate increase in the cost of living.

The figures from the Institute of Fiscal Studies show that even the five per cent up-rating for the basic public sector pension due in April will not be enough to ease the pressure on older people.

Automatic payment of benefits could lift a huge number of older people out of poverty

Age Concern and Help the Aged point out that with up to £5 billion worth of benefits going unclaimed every year, it is time the Government removes the barrier of claiming and makes benefit payment automatic for older people.

Mervyn Kohler, special adviser for Help the Aged, said:

'The government has known for a while that automatic payment of benefits could lift a huge number of older people out of poverty - what's needed now is the political will to make it happen.'

Two and a half million people over 65 currently live in poverty.

What benefits can you claim?