David Cameron has said that he would give relief to savers who are suffering amid falling interest rates which are severely affecting their investment incomes, and he vows to transform Britain from a "spend, spend, spend society into a save, save, save society."
The leader of the opposition party has announced a series of new policies, with which he aims to encourage saving amongst Brits and "ensure a good future for Britain's future."
While Gordon Brown has said that the UK is in a stronger position to weather the credit storm than other countries, and has slammed Cameron for offering up a typically conservative laissez faire attitude to the economic crisis, the Conservative leader has said that the UK is in "a weaker economic position than other countries" as a result of Labour's spendthrift behaviour.
The Prime Minister has allowed Government, corporate and personal debt
to get out of control, he said, adding that he would like to see Britain change "from an economy built on debt into an economy built on saving; from a country and government that has lived beyond its means to one that lives within its means."
For savers who have no choice but to watch as the value drains out of their investments
, which is hitting pensioners particularly hard, Cameron said he would abolish income tax on savings accounts
for basic rate taxpayers. For pensioners, he would raise the tax allowance by £2,000 to £11,490.
To pay for these changes, Mr Cameron would restrict spending on other Government departments to a one per cent real increase in the year 2009/2010, with the exceptions of health, schools, defence and international development.
Rates on savings accounts
have fallen drastically in recent months, many to one per cent or less, as the Bank of England has cut rates to just two per cent.
Cameron's spotlight on the plight of savers has been welcomed by over 50s financial services provider Saga
, which sees savers as the "innocent victims" of the credit crunch, those who have saved while others have spent, invested while others borrowed.
"We welcome David Cameron's plans to scrap taxes on basic rate taxpayers' savings and increase the level of non-taxable income for pensioners by £2,000 a year." said Emma Soames, editor at large of Saga Magazine.
"If implemented, these changes would help savers, especially the older generation, ride out the economic storm more easily. This is an issue that Saga is passionate about as we constantly hear from readers who rely on the interest from their hard-earned savings to boost their income in retirement.
"Most over 50s have worked to build up substantial nest eggs to fund their golden years and there is a real injustice in them now seeing the interest on their savings being not only eroded but also taxed. Overall, pensioners are not the ones with huge mortgages
and credit card
bills and so should not have to foot the bill for others' borrowing. They are currently being severely punished for their prudence."
© Fair Investment