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Victims of recession
LOTS of us may be having to tighten our belts as the economic crisis continues, but savers and pensioners are the people who have suffered the most.
These are innocent victims of recession as they have seen the income from their savings fall so dramatically over recent months.
Many local people, and indeed people all over the country, have written to me to explain that they feel like they are being punished for having been prudent and putting money aside for their retirement or for a rainy day.
And that's why Conservatives have recently called for specific help for savers and pensioners. We believe that taxes for these groups should be cut – not only would it help individuals and families but it would go some way towards restoring a culture of saving in this country – something that has been significantly eroded over recent years. There are two main strands to our plans:
Basic rate taxpayers would pay no tax at all on their income from savings, making them up to 7,200 a year better off. In a nutshell, this proposal would abolish the unfair scenario where money is taxed when you earn it and then taxed again on the interest it accrues.
The income allowance for pensioners would be increased, with age-related personal allowances rising by 2,000, helping them by up to 400 a year. Just to explain a bit deeper, the income tax personal allowance for those aged under 75 would increase from 9,490 to 11,490 and for those over 75, it would increase from 9,640 to 11,640.
It's estimated that across the South East, 3,141,840 people would benefit from these changes.
Added to that, and very significantly, financing the tax cuts would not affect spending on health, schools, defence or international development. The 4.1m package would be paid for by reducing the real rate of spending growth for other departments by 5bn.
In due course, we will be setting out more detail of our planned radical reforms to the culture of Whitehall which will help to achieve these savings, without hitting frontline services – by improving financial accountability and entrenching value for money.
I'd be very interested to hear readers' views on this issue as I know that it is something that affects a significant number of people living in the Horsham area.
So, feel free to get in touch with me at the House of Commons, London SW1A 0AA.
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Weather for Horsham
Thursday 24 May 2012
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