"languish on benefits"!
He admitted spending on pensions would have to rise, but he said this could be partly offset by making people "languishing on benefits" get jobs.
The Prime Minister is under pressure to explain how he would solve the pensions crisis if Labour wins a third term.
More than 12 million people are not saving enough for their retirement, the Pensions Commission found this week.
The Commission's report, by chairman Adair Turner, said a mix of higher taxes, more saving and a higher average retirement age was needed to plug the gap.
The government's pensions policy is literally falling apart at the seams
George Osborne, shadow chief secretary to the Treasury
In a speech to centre left leaders in Budapest, Mr Blair indicated incapacity benefit money would be diverted into the pensions pot.
"In the UK today we have a big debate about how we can provide pensions for people for the future.
"And we will probably have to spend more as a government supporting pensions in the future.
"But that will mean we will have to spend less, particularly in areas where there are people who could work but who presently languish on benefits."