12th December 2008
Interest paid on savings accounts for UK pensioners should be tax-free, one of the largest societies in the UK, Skipton Building Society has stated.

Backing calls for such a move to be initiated, the organisation says that pensioners have cut back on spending significantly more than other UK adults as a result of the credit crunch.

According to the society, interest rates are falling but pensioner inflation is rising and over 50s need more protection from the government as the hard economic climate has hit them hardest.

"Tax reduces the income pensioners earn from savings by at least 20 per cent," explained deputy chief executive David Cutter. "This is on top of cuts in interest rates that have seen returns fall by around 40 per cent in the last few months.

"The combined effect on pensioners is particularly tough. The Government should be supporting the most vulnerable people in our society in these difficult times, particularly pensioners."

On average a pensioner's income is around £12,500 per year.



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