LONDON: Savers are expected to be rewarded in George Osborne’s Budget on Wednesday as he seeks to help those, including pensioners, who “do the right thing” and put money aside for the future.
The chancellor wants to help those suffering from paltry returns because of low interest rates, although his allies described as “inaccurate” a report in The Independent newspaper that he would scrap the 20p income tax rate on savings incomes.
High quality global journalism requires investment. Please share this article with others using the link below, do not cut & paste the article. Those close to the Budget preparations say a £1,000 tax-free amount for savings income will be part of the package, although Treasury insiders questioned that figure when the Financial Times put it to them on Tuesday.
Savers with money in banks and building societies pay 20 per cent income tax at source on their interest payments, with higher earners paying more through their tax return.
Although Mr Osborne has promised “no gimmicks” in the Budget, the policy would be highly political: most people on modest incomes already shield their savings incomes in individual savings accounts (Isas). As such, the tax break would not be expensive to the exchequer.
