WITH VIDEO: David Cameron has hinted that protecting pensioner benefits for wealthy OAPs would go into the Conservatives' next manifesto during a trip to Peacehaven.

The Prime Minister said not giving benefits, such as winter fuel allowances, bus passes and cold weather payments, to top-rate taxpayers would save only "a tiny amount".

Speaking to Saga members in Peacehaven, Mr Cameron said that cutting the benefits would also "introduce another complexity into the system".

He told the audience: "We will set our policy for the next Parliament at the next election. I don't want to pre-judge that.

"But the only thing I would say is that people think you save lots of money by not giving these benefits to upper-rate, top-rate taxpayers.

"You save a tiny amount of money and you always introduce another complexity into the system. We made our promises for this Parliament, we kept our promises, I'm proud of that."

Mr Cameron also suggested he would propose in the next manifesto to raise the inheritance tax threshold, saying it should only be paid by the rich.

Passing money down to their families helped contribute towards "a stronger society" and people should not be hit by inheritance tax where they have worked hard and saved.

He said: "Would I like to go further in future? Yes, I would. I believe in people being able to pass money down through the generations and pass things on to their children.

"I think you build a stronger society."

He added: "Inheritance tax should only be paid for by the rich. It shouldn't be paid for by people who have worked hard and saved, and bought a family house in, say, Peacehaven.

"So the ambition is still there and I would like to go further. It's better than it was, but it didn't make it into the coalition agreement.

It's something we will have to address in our manifesto."

The Prime Minister attempted to capitalise on the positive reception for the coalition's radical pensions shake-up, which includes moves to scrap rules that force most pensioners to use their direct contribution funds to buy an annuity, even though the rates can be poor.

Although most of the reforms will apply from April next year, a number will be brought in from Thursday to ensure people close to retirement do not miss out.

Individuals with total pension savings of £30,000 or less will be able to take the full amount as a lump sum, nearly double the current £18,000 limit.

The minimum annual income required to access a pension fund flexibly will also be cut from £20,000 to £12,000, while access rules will be eased so people with substantial pots can draw higher incomes.

Mr Cameron said the moves were to enable pensioners to have "greater freedom" over what to spend the money they have saved on.

He said it was "deeply condescending" to say that pensioners would blow their cash, adding: "They are not irresponsible people, they are responsible people, that's why they saved in the first place."

Asked whether the Government expected OAPs to use their retirement pot to buy properties to rent, and whether the Treasury had undertaken work on the possible impact on the housing market, Mr Cameron's official spokesman told a Westminster media briefing: "The Prime Minister's view is that it is right to give people greater choice.

"These are people who have been saving for many years in defined contribution schemes and we trust them in the decisions they make.

"It's not for me to give advice. It is about ensuring that good advice is available to everyone."