Coalition ministers have traded blows over pensioners' benefits after Iain Duncan Smith urged the wealthy to hand the money back.
The Work and Pensions Secretary said he would "encourage" people to forego perks such as free TV licences and winter fuel payments.
But Deputy Prime Minister Nick Clegg responded by attacking the Tories for blocking means-testing of the benefits.
Mr Duncan Smith's Conservative Cabinet colleague Ken Clarke said he did not believe it was even possible to return money to the Government.
David Cameron has stood by his general election pledge to protect universal benefits for pensioners until at least 2015, despite the coalition's austerity drive.
But in an interview with the Sunday Telegraph, Mr Duncan Smith repeated his view that wealthy pensioners should consider repaying the money. "It is up to them if they don't want it to hand it back," he said. "I would encourage everybody who reads the Telegraph and doesn't need it to hand it back."
Interviewed on the BBC's Sunday Politics, Liberal Democrat leader Mr Clegg said: "I have always argued for us to change the system. I do not think it is reasonable for us to say to a working family who has just had their child benefit taken away... why should they through their taxes pay for the multi-millionaire pensioner next door for his TV licence or his winter fuel payment? I think we should grasp this nettle just as we have grasped other nettles in government. The Conservatives don't want to do so."
Asked about Mr Duncan Smith's comments, Mr Clegg said: "I think the idea of saying in the meantime, you give people benefits and then you say, 'Oh, by the way, can you please give them back?' - I don't think that makes sense. Let's be clear about this. When money is tight, you have to have the right priorities in tough times."
Mr Clarke, 72, refused to say whether he personally returned the universal benefits he is entitled to. "It is certainly the case when it comes to a bus pass and when it comes to the winter fuel all taxpayers should decide and recipients should decide what to do with it themselves," he told the Murnaghan programme on Sky News.
"You can't hand it back to the Government. I don't think it is a system for doing that. Every pensioner and retired person like myself has to make up their own mind about whether they really need it and whether they are going to give it to some worthwhile cause. No doubt most pensioners who are reasonably prosperous give quite a lot of money to charity and worthwhile causes in any event."
Seven retirement nightmares
Ministers disagree in benefits row
Figures from charity Age UK show that 29% of those over 60 feel uncertain or negative about their current financial situation - with millions facing poverty and hardship. Even though saving for retirement is not much fun, the message is therefore that having to rely on dwindling state benefits in retirement is even less so. To avoid ending up in this situation, adviser Hargreaves Lansdown recommends saving a proportion of your salary equal to half your age at the time of starting a pension. In other words, if you are 30 when you start a pension, you should put in 15% throughout your working life. If you start at 24, saving 12% of your salary a year should produce a similar return.
Many older couples rely on the pension income of one person - often the man. Should that person die first, the other person can therefore be left in a difficult position financially.
One way to prevent financial hardship for the surviving person is to take out a joint life annuity that will continue to pay out up to 67% of the original payments to the surviving partner should one of them die.
The disadvantage of this approach, however, is that the rate you receive will be lower. Again, the Pensions Advisory Service on 0845 601 2923 is a useful first port of call if you are unsure what to do.
Around 427,000 households in the over-70 age groups are either three months behind with a debt repayment or subject to some form of debt action such as insolvency, according to the Consumer Credit Counselling Service (CCCS).
Its figures also show that those aged 60 or older who came to the CCCS for help last year owed an average of £22,330. Whether you are retired or not, the best way to tackle debt problems is head on.
Free counselling services from the likes of CCCS and Citizens Advice can help with budgeting and dealing with creditors.
Importantly, they can also conduct a welfare benefits check to make sure you are receiving the pension credit, housing and council tax benefits, attendance and disability living allowances you are entitled to.
The average UK pensioner household faces a £111,400 tax bill in retirement as increasing longevity means pensioners are living on average up to 19 years past the age of 65, according to figures from MetLife. And every year in retirement adds an extra £5,864 in direct and indirect taxes based on current tax rates to the costs for the average pensioner household. You can be forced to go bankrupt if you fail to pay your taxes, so it is vital to factor these costs into your retirement planning.It is also important to check that you are receiving all the benefits and tax breaks you are entitled to if you want to make the most of your retirement cash.
The cost of a room in a care home in many parts of the country is now over £30,000 a year, according to figures from Prestige Nursing and Care. So even if the prime minister announces a cap on care costs - last year the economist Andrew Dilnot called for a new system of funding which would mean that no one would pay more than £35,000 for lifetime care - families will still face huge accommodation costs. Ways to cut this cost include opting for home care rather than a care home. Jonathan Bruce, managing director of Prestige Nursing and Care, said: "For older people who may need care in the shorter term, home care is an option which allows people to maintain their independence for longer while living in their own home and should be included in the cap." However, the only other answer is to save more while you can.
Older Britons are often targeted by unscrupulous criminals - especially if they have a bit of money put away. For example, many over 50s were victims of the so-called courier scam that tricked into keying their pin numbers into their phones and handing their cards to "couriers" who visited their homes. It parted consumers from £1.5 million in under two years. Detective Chief Inspector Paul Barnard, head of the bank sponsored dedicated cheque and plastic crime unit (DCPCU), said: "Many of us feel confident that we can spot fraudsters, but this type of crime can be sophisticated and could happen to anyone." The same is true of boiler room scams that target wealthier Britons with money to invest, offering "once-in-a-lifetime" opportunities to snap up shares at bargain prices. Tactics to watch out for include cold calling, putting you under pressure to pay up or lose the opportunity for good, and claiming to have insider information that they are prepared to share with you.