Douglas Carswell

27 JAN 2016

Low interest rates make pensioners poorer to keep bankers rich

British people are living longer, healthier lives. That's fantastic! But we're also facing a problem: the Bank of England is making it harder to save for retirement than ever before.

Mark Carney recently announced he would be keeping interest rates at record lows of 0.5% for an eighth consecutive year. Borrowers will see that as good news. But it's very bad news for savers – and people with pensions most of all.

Artificially low interest rates are making it far too hard for private pension funds to get a return on investments. Years of low yields mean many funds are in crisis – or have had to stake their customers' retirements on higher-risk assets. Either way, savers suffer.

Low interest rates hurt insurers too, for the same reason. If investment returns are lower, premiums have to be higher - meaning policy holders have to pick up the tab.

In every case, the debasement of currency transfers wealth from ordinary people to wealthy corporate elites.

At the same time, the State pension is in crisis. We know pension liabilities are unfunded in the long-term. Where's the security for retirement there?

Pension funding should be a policy priority. Instead it's being brushed under the carpet. As the pressure on State pensions grows, it's all the more important for people to be able to save independently. It's time to stop putting bankers first, and raise the rates.

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