Ahead of the Budget next week, John Baron MP is calling on the Prime Minister to help savers and pensioners, the forgotten victims of the current recession. As a result of falling interest rates, someone relying on savings interest will have seen their income halve over the last year, leading to lower standards of living. John has welcomed Conservative proposals to help savers which include:
- Restoring income from savings by scrapping the double taxation effect – money taxed when earned and interest then taxed again – for basic rate taxpayers. This could benefit up to 25 million savers by as much as £7,200 per year.
- Promoting saving by increasing age-related personal allowances for those aged 65 and over by £2,000. A pensioner couple with a total pension income of £14,000 a year would be up to £800 a year better off.
- Fairness for pension holders at 75 – suspending the requirement to annuitise accrued pensions. Currently, many pension holders are forced to buy annuities at 75 which, because of the downturn, would give them a lower income.
“Savers and pensioners are the forgotten victims of this recession. Having done the right thing and put money aside for a rainy day, people are now facing falling living standards. This has been made worse by Gordon Brown undermining savings and raiding private pensions.”
“Scrapping tax on savings for basic rate taxpayers and increasing personal allowances by £2,000 for those aged 65 or over would make a real difference to people living on their savings today whilst also creating an incentive for others to save for the future. This is vital if we are to restructure our economy away from debt and back towards savings and investments.”
“I am calling on Gordon Brown to adopt these proposals and include them in the budget next week. The Government should stop dithering and take action.”