The Low Incomes Tax Reform Group has criticised HM Revenue & Customs and the banking industry for failing to provide adequate information on savings for pensions who do not pay tax.
According to the group, pensioners who are not required to pay tax need access to information on how to prevent the interest on their savings from being taxed.
However, a survey of high street bank and building society branches revealed that the majority did not provide the relevant R85 tax form for 2007-08 or the accompanying help sheet.
Blaming HMRC for the problem, the group suggested that the department had delegated responsibility to banks without being in a position to "police what happens", while it "expects the pensioner to be all-knowing about the correct procedures".
The organisation called for more co-operation between those involved in the process to ensure that such customers receive adequate information.
Earlier in the year, Prudential reported that the cost of living for people over the age of 65 is rising at a greater rate than the UK's average.
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