Let's learn to save

Yesterday's announcement by David Cameron that the Tories are to propose abolishing basic rate tax on the interest earned on savings has got to be welcomed. Many people throughout the land have saved their money so that they can enjoy a good retirement living off the interest. And while the young 'uns, like myself, welcome lower Interest rates so that our mortgages are cheaper, it can decimate a pensioner's income. Reducing the tax on interest won't solve the problem, but it can certainly help.

There is also the moral case that someone shouldn't be taxed on earnings and then taxed again if they choose to save it rather than spend it. It will inevitably get taxed when it gets spent anyway, though VAT. This Government inherited a household savings ratio of nearly 10% of income in 1997, which is now down to just below 2%, showing just how much our savings culture has all but vanished. With figures also showing that household debt has ballooned is it any wonder why we're in a credit crunch built recession?

We need to learn to save again and rid ourselves of debt, saving to spend rather than borrowing to spend needs to be the new mantra. Let's each do our bit, I'm now going to put the money saved from the reduced mortgage interest payments into paying the mortgage off sooner. The Government needs to do likewise and reduce spending on extraneous projects (not NHS and Schools, but ID cards and expensive IT projects) and reduce its borrowing.

Only then will we have learnt the lessons of this credit crunch induced recession.

Squiffy.