Skipton backs calls for tax-free savings for pensioners

Skipton Building Society has backed calls for interested paid on savings accounts to be paid tax-free for UK pensioners.

The Society, whose own savings account for pensioners, Pension Plus, is regularly featured as a ‘best buy', believes that the over 50s should be offered more protection by the Government. With interest rates falling and pensioner inflation rising the effects of the Credit Crunch are being felt hardest by the over 50s.

Skipton's own independent research, published in August, "Credit Crunch Britain", showed that pensioners had cut-back on spending significantly more than other UK Adults. The research indicated that 84% of the over 55s had cut back on spending since the start of the Credit Crunch, compared to an average of 58% across all UK adults.

Commenting, David Cutter, deputy chief executive, Skipton Building Society, said: "With the average income standing at around £12,500 per year, pensioners are particularly sensitive to changes in interest rates and their cost of living.

Tax reduces the income pensioners earn from savings by at least 20%. This is on top of cuts in interest rates that have seen returns fall by around 40% in the last few months. The combined effect on pensioners is particularly tough.

Skipton believes that the Government should be supporting the most vulnerable people in our society in these difficult times, particularly pensioners."