21 April 2009
Saffron Building Society comment pre-Budget
On Wednesday, Alistair Darling is set to present his second Budget amid troubled economic circumstances. Saffron Building Society, the regional mutual serving the East of England, hopes that savers will be given a boost by the contents of Mr. Darling's speech.
Saffron has seen a notable increase in numbers of savers since the beginning of 2008, and Chief Executive Andy Golding hopes that those who diligently put aside money will be rewarded by Wednesday's announcements.
"The unprecedented fall in Bank of England Base Rate has been to the detriment of savers who are no longer enjoying profitable rates of interest on their accounts. As a regional mutual whose membership is made up predominantly of savers, we are acutely aware of the impact of low saving interest rates and want to see more support for our savers - particularly those who rely on their savings interest for income".
Early predications suggest that the basic rate of income tax on savings income will remain, despite calls to abolish it. However, there is the hope that the annual ISA allowances will increase from £7,200 to £10,000 per person, permitting up to £5,000 of savings a year in cash and £5,000 in stocks and shares to earn interest tax-free.
"We would welcome an increase in ISA allowance" said Andy. "We fully support any incentives to save, and protecting interest from the taxman is a good start. Rates will not stay low forever and, once they rise, those who have diligently built up their ISAs will be duly rewarded".
Saffron's serves a number of smaller, rural communities with branches in local market towns; some of which have seen shop closures and the withdrawal of facilities as a result of the economic downturn.
"This is particularly difficult for older people in these communities" Andy explained. "We are committed to maintaining our branch network and the availability of our services in smaller communities.
"We hope to see some additional relief for pensioners in the Budget. We have many long-serving customers who have saved all their lives, who are now struggling to make ends meet. Their savings are not giving the return they have expected, and many of them are experiencing high levels of personal inflation. It's time for the Government to step in and offer the same levels of support for savers as it has for borrowers"
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