A further £25bn spending cuts will be needed after the next election, Chancellor George Osborne has warned.
He suggested making welfare savings by cutting housing benefit for under-25s and restricting council housing for those earning over £65,000 a year.
His comments about future cuts came ahead of a speech in which he is due to warn of a "year of hard truths".
But Labour says the chancellor should admit his policies have failed and have led to a cost-of-living crisis.
BBC political editor Nick Robinson said the announcement was about politics as much as economics.
Mr Osborne, he said, "wants to to set the political baseline for the economic argument in the run up to the next general election and if... Labour refuse to back his plans he will accuse them of planning to run a higher deficit or to raise taxes in ways which they have so far failed to spell out".
'Long way to go'Asked if some pensioner benefits could be means tested the chancellor told BBC Radio 4's Today programme the Conservatives' values had not changed, suggesting they would continue to support all pensioners getting things like the winter fuel allowance, irrespective of income.
Issues that he did highlight as possible areas for savings were the payment of housing benefit to people aged under 25 and also people living in council houses while earning more than £65,000 a year.
In his speech later Mr Osborne is expected to warn: "As a result of the painful cuts we've made, the deficit is down by a third and we're borrowing nearly £3,000 less for every one of you and for every family in the country.
End Quote George OsborneWe've got to make more cuts. That's why 2014 is the year of hard truths - the year when Britain faces a choice"
"That's the good news. The bad news is there's still a long way to go."
He said the UK was "borrowing around £100bn a year - and paying half that money a year in interest just to service our debts".
He added: "We've got to make more cuts. That's why 2014 is the year of hard truths - the year when Britain faces a choice.
"Do we say 'the worst is over, back we go to our bad habits of borrowing and spending and living beyond our means and let the next generation pay the bill'?
"Or do we say to ourselves 'yes, because of our plan, things are getting better - but there is still a long way to go and there are big, underlying problems we have to fix in our economy'?"
His speech comes as the head of the office that issues the government's bonds said the UK could find it harder to convince investors to buy its debt in the years ahead.
The next couple of years could potentially be a "little more challenging" because of rising interest rates, when investors may be more "reticent" to buy British debt, Robert Stheeman told the BBC.
Manifesto 'plank'On Sunday, David Cameron promised older voters the state pension would continue to rise by at least 2.5% a year if the Conservatives won the next election.
The prime minister pledged to keep the "triple lock" system, which ensures the state pension goes up by whichever is higher - inflation, wages or 2.5%.
He described his announcement as the "first plank" of the Conservative general election manifesto.
Mr Cameron also hinted on the BBC's Andrew Marr Show that he was hoping to be able to offer tax cuts as the economy improved and left the door open to a further reduction in the 45p top rate of income tax.
Shadow chief secretary to the Treasury Chris Leslie said that "while millions of ordinary working people are worse off under the Tories", Mr Osborne and Mr Cameron were "paving the way for yet another top rate tax cut for millionaires".
He said the reason more spending cuts were needed was because Mr Osborne's "failure on growth and living standards since 2010 has led to his failure to balance the books".
"What we need is Labour's plan to earn our way to higher living standards for all, tackle the cost-of-living crisis and get the deficit down in a fairer way."
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