Treasury set to send back pensioners' 75p cheques

More than 40 pensioners who sent the Treasury cheques for 75p in protest at the small increase in the state pension are likely to get the cash back.

More than 40 pensioners who sent the Treasury cheques for 75p in protest at the small increase in the state pension are likely to get the cash back.

Government sources said they hoped to return more than £50 which has been sent to the Chancellor by angry pensioners or the money would donated to an old people's charity.

The existence of the small fund emerged after a pensioner in Devon wrote to The Independent this week saying a cheque for 75p she had sent to Gordon Brown in protest at the pensions' rise had been been cashed in late July.

Nora Knight, 78, who lives with her husband Denis in a small village near Plymouth, said she was "outraged" at the paltry rise and equally surprised that the Chancellor of the Exchequer's officials had banked her cheque. She said she would refuse the money.

The Government source said: "We're working out the best way to get the cash back to the people concerned or to charities. There is no question of us keeping the cash."

The Knights live on less than £12,000 a year, based heavily on an occupational pension of £516.72 a month for Mr Knight, a former English teacher who is 79 today. They also grow vegetables and keep chickens. Mrs Knight, a retired civil servant and life-long Labour voter, also dismissed strong hints from Mr Brown and Tony Blair during the conference that the Government will increase the basic pension, possibly by £5 to £10, before the election.

Mrs Knight said: "I wasn't terribly impressed." She wants the full link between pensions and average earnings restored, with tax clawback from wealthier pensioners.

"I think this small rise is just a way of getting out of a hole and they want to make sure at the next election they get in again. It doesn't seem permanent to me. It all seems flimsy."

The Government source said pensioners had already received £6.5bn in special payments, the minimum income guarantee and pensions increase. This was £2.5bn more than they would have received if basic pensions were linked to wage rises, he said.