Older savers `may suffer due to interest rate cut`

Although the recent reduction in interest rates of 50 basis points will be welcomed by many consumers with loans and mortgages, older savers may suffer.

This is the opinion of Age Concern, which said that such people will be left feeling penalised for their prudence.

The charity stated: "Many older people who rely on the interest from modest savings to top up their income will be anxiously counting the cost of recent cuts, particularly as so many are already struggling to pay high household bills."

It added that the government must prove its commitment to helping pensioners struggling with their personal finances - potentially including those with high level debts - by paying the billions of pounds in unclaimed benefits automatically to everyone who qualifies for them.

Research published recently by Friends Provident suggested that 57 per cent of people questioned believed the state pension should be considerably increased in value.