Today we have a very welcome announcement from the Conservatives. They are going to restrain spending in several Government departments and use the money to give a break to hard-pressed savers now and encourage more saving in the future. Basic rate taxpayers will no longer pay tax on their savings and pensioners will get £2,000 added to their tax free allowance.
This is great news. Government departments have seen huge increases in their budgets in the last ten years and much of that new money has been wasted. Some restraint would encourage them to prioritise and make better use of taxpayers' money. Savers are being squeezed by the reductions in interest rates needed to try and get the economy going again and, in the long term with an ageing population, encouraging people to set aside more for their retirement is also a good idea.