The Tories pledged yesterday to spend £1.3bn a year to ensure that every pensioner gets a discount on his or her council tax bill if the party wins the forthcoming general election.

The money is to be raised from promised £4bn savings from Whitehall cuts, ranging from abandoning the New Deal for the unemployed to cutting administrators in the NHS, and will be implemented in the party's first budget, which would be expected in March 2006.

The council tax discounts - an average one would work out at £340 a year - would be available to some 3.8 million pensioner householders, covering 5 million pensioners.

To claim the cash each pensioner household would have to tick a box on their council tax form. Only households where both members were over 65 would get the money.

Two groups would not get the full benefit. The poorest group of people who already get a big means-tested reduction in their council tax bills would not benefit. The wealthiest landowners would have any deduction capped to ensure they do not make the biggest savings. Full details of the proposals are to be revealed today.

The changes promised by the Tories would also be affected by pension pledges made by David Willetts, the party's shadow works and pensions secretary.

Average pensions for couples would rise by £7 a week, but all pensioners would also lose the £200 a year flat rate benefit towards fuel bills. So in some cases pensioners may not be better off, particularly if they already receive means-tested benefits.

Michael Howard, the party leader, made the pledge on the BBC1's Politics Show. "Of the £4bn we have set aside to give taxpayers back of their hardearned money, £1.3bn will be set aside in order to help these 5 million pensioners with their council tax bills," he said.

"We make this our priority. We think that older people in our country need dignity, respect and security. We owe them a great deal, many of them fought for the freedoms which we enjoy today. I think you can tell a lot about a country by the way it treats its older people."

Mr Howard said Labour had used the council tax as one of its most unfair and oppressive stealth taxes.

He acknowledged that the very poorest pensioners already got help, but said there were many more just above the threshold who faced great difficulty in coping with council tax rises.