Savers demand government suspend income tax on savings income

15th August 2011

Save Our Savers says it has written to the chancellor George Osborne demanding he give relief to "hard-pressed savers".

In a statement Save Our Savers said: "32 months after David Cameron called for a move "from an economy built on debt to an economy built on savings" Save Our Savers has written to the Chancellor, requesting him to suspend income tax on savings income as the climate for savers continues to deteriorate."

SOS claimed the proposal was similar to a plan mooted by the Chancellor and the Prime Minister in 2009 to abolish income tax on savings for basic-rate taxpayers.

Save Our Savers said it had submitted a Freedom of Information request to HMRC which revealed that total tax receipts on savings interest for 2009-2010 were £3,366 million, of which £2,426m was paid by starter and basic-rate tax payers, and £940m by higher rate. 

HMRC also estimated that in 2.4 million savers have overpaid tax on their savings by not submitting the correct paperwork.

Simon Rose of Save Our Savers said: "As George Osborne himself said in December 2008: "Savers and pensioners are the forgotten victims… They are innocent bystanders and it's simply not good enough for the Government to walk on by."

"According to the IMF, the UK has the highest household debt and the lowest savings ratio among the G7 nations. If we are to get out of this mess, we must reduce debt and encourage savings. Yet savers have suffered negative real interest rates for almost three years. "

What do you think? Have your say below.

Sign up for our free email newsletter here, for your chance to win an iPad 2.       

Leave a Reply

Your email address will not be published. Required fields are marked *