Half a million pensioners are losing out from unfair Government rules (Islington Liberal Democrats)

Islington Liberal Democrats <Islington_ld@cix.co.uk>

Half a million pensioners are losing out from unfair Government rules

January 24, 2009 12:00 PM

Bridget Fox with Islington pensioner Dolly Sparks

Bridget Fox and the Lib Dems want fairer pension credit rules

More than 500,000 pensioners could be missing out on over £800 because of benefit rules which assume they are getting up to 7% interest rate on their savings, analysis by the Liberal Democrats has revealed.

Research by the Liberal Democrats has shown that the Government benefit rules assume pensioners with savings of more than £6,000 who are eligible for pension credit are getting up to 7% return on their savings. This is a far higher rate than is available on even Government schemes like National Savings and Investments.

Falling interest rates are bad news for pensioners and anyone relying on their savings. But the Government is adding insult to injury by benefit rules that assume a 7% interest rate. The Government's own records show that savings rates were at 6% in December 2007, and have been falling ever since.

Islington Liberal Democrat campaigner Bridget Fox says,

"It's desperately unfair for the Government to refuse help to pensioners with small savings on the basis of such outdated rules.

"Labour's interest in pensioners is falling as low as the interest rates in the real world".

Liberal Democrat Shadow Work and Pensions Secretary, Steve Webb says:

"Life is hard enough for savers without the Government making it more difficult by inventing interest rates that nobody could possibly hope to get.

"Saving rates in the real world are plunging, yet the Government shows no sign of altering its own fantasy interest rates.

"When people who have worked hard and saved hard apply for financial help they should be rewarded for saving, not penalised in this absurd way.

"The Government should immediately change its rules and bring its assumed interest rates into line with what pensioners can actually hope to receive."