The Liberal Democrats have promised to raise the basic state pension by more than £100 a month for over 75-year-olds.

It would rise from just under £80 to £105 per week in a £2.7 billion pledge which will be at the centre of the Lib Dems' election campaign.

At first only the four million oldest pensioners would be affected but there are plans to expand the scheme to cover all 11 million retired people.

The pledge, details of which will be outlined on Tuesday, is designed to tackle pensioner poverty and increase incentives for private saving in the future by reducing means-testing.

At the moment pensioners with modest savings effectively pay tax of 40 per cent on the first £25 a week of their private pensions.

Pensions spokesman Steve Webb said: "We think this will be a massive simplification and will stop people thinking it's not worth saving for their private pension."

The Lib Dems believe a massive overhaul is needed with increased openness, simplicity and flexibility. "Pensions need to be simple, flexible and reliable" said Mr Webb.

"So much of pensions is rooted in the industry of the 60s and the family structure of the 40s and we need a pension system that fits with the modern world."

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Gordon Lishman, director general of Age Concern England, welcomed the move and urged the government to adopt a similar line.

Lishman told ePolitix.com: "The level of the state pension is disgracefully low and leaves many pensioners struggling to cover basic living costs. It should be increased to at least £105 a week to provide a solid foundation for retirement.

"More must also be done to make it easier for people to qualify for the basic state pension as the current system is littered with obstacles for people who do not have traditional working patterns such as carers and part-time workers.

"Just 13 per cent of women pensioners have managed to build up entitlement to a full basic state pension.

"Older people are telling Age Concern that pensions are an issue which could influence which political party they vote for at the next general election.

"Older voters are twice as likely as younger people to turn out to vote and the over 50s are likely to have a significant impact on the result of the election. All political parties must commit to improving pensions for today’s and tomorrow’s pensioners, otherwise they could be punished at the ballot box."