A campaign launched today by the Daily Telegraph is urging the Government to help pensioners through tax cuts as their retirement income takes a hit from falling savings account rates.
The campaign, which is backed by a number of MPs and charities, wants help for the nine million pensioners who rely on their savings and investments to provide part of their retirement income.
The Bank of England made the decision to cut interest rates to just two per cent last week, a move which is expected to help mortgage
holders. However, savers will lose out, campaigners warn, as some savings account
rates are falling as low as one per cent.
In support of the Daily Telegraph's Justice for Pensioners campaign, former conservative Cabinet minister, John Redwood said: "This campaign is needed and deserves to succeed. To get out of the mess over borrowing we need more savers.
"The interest rate cut will, in due course, help the borrowers but hit savers hard. It is high time the Government balanced it up. Those who are retired are particularly vulnerable."
According to the Daily Telegraph
, the average investment income received each week by a pensioner is £51, which could fall dramatically if, as experts are predicting, further cuts are made to savings rates.
Conservative MP Michael Fallon added: "Savers are the forgotten majority. There are more of them than borrowers and yet this Government appears to be taking them for granted.
"People should not be taxed repeatedly. They are taxed when they work, taxed when they save and then taxed again on their savings."
Commenting on the effect this could have on pensioners, Gordon Lishman, director general of Age Concern said: "Many older people who rely on the interest from limited savings to top up their income are being hard hit by the double whammy of interest rate cuts and higher basic food and energy bills.
"This could have a big impact on the ability of those living on modest means to make ends meet. Many of these older people will feel that they are being penalised for having saved."
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