Pensioners hit by rate cuts

December 11th, 2008

North Thanet’s MP, Roger Gale, has this (Thursday) morning raised concerns at the manner in which the fall in interest rates coupled with the tumbling value of the pound is affecting North Thanet’s retired community and other constituents who have moved to live elsewhere in the Euro-zone.

"The cut in interest rates might be good for those with borrowings, if the banks would pass on the reductions" says the MP "but it is most certainly not good for those very many more people who have led prudent and thrifty lives, invested for their retirement and now find themselves in receipt of dramatically reduced incomes. Bills that particularly hit the elderly - fuel and food costs - have risen at the same time that real retirement incomes have fallen.

Those who have moved to France and Spain, for example, where there is a large ex-patriate community, have been particularly hard hit. First, the amount of money coming in from savings in the UK has been reduced and then the value of the pound against the Euro has fallen making their money worth less still. Many of these people are trapped. They would like to come home but cannot sell their properties because the market is flat and such sale value as they might achieve is insufficient to obtain another home back in East Kent.

The government has mortgaged our future and our children's future to help the banks and has engaged in a futile reduction in VAT that has failed to stimulate the economy: it would do well to look at the income tax that pensioners pay on their savings and to make a significant cut there. At present the Prime Minister's claim to have increased winter fuel payments while at the same time `saving the World` has a pretty hollow ring about it for many of the elderly people that I represent.

It is high time that we started to help those, who, throughout their entire working lives have paid their way, served their country and, through savings, tried to help themselves."