Pensions `may suffer due to rate cut`

Pensioners may run into personal finance problems as a result of the Bank of England`s decision to lower the base rate of interest, a charity has warned.

According to Age Concern, such people may lose out through lower savings rates.

It said: "Many older people who rely on the interest from their savings to top up their income could be hit hard by these cuts, particularly as so many are already struggling to pay basic household bills."

However, the organisation also suggested that the reduction in the base rate from three to two per cent will be "music to the ears" of older people with loans and mortgages.

Recently, Just Retirement released the results of a study which suggested that nearly a quarter (24 per cent) of people approaching retirement are in debt.

It also said that rising living costs mean that pensioners now have less disposable income than in the recent past.