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Base rate reductions slash pensioner income by 25 per cent

Interest rate cuts have hit more than 8 million pensioners with a quarter fall in their monthly income according to Safe Home Income Plans.

The trade body says 80 per cent of UK pensioners rely on savings or share-based investment income to help fund their daily living expenses and this has been decimated by the base rate cuts over the past year.

In April 2008, the average pensioner was enjoying a monthly return of £158 from their savings if they kept the capital in a base rate tracker account.

This was in addition to their monthly state pension of £393 and accounted for 28.62 per cent of their overall income.

Since April 2008, single pensioners have seen their savings income dwindle to just £16 per month.

Ship director general Andrea Rozario says: “Many pensioners have saved their whole lives with the expectation that they can use income from this capital and the state pension to fund a comfortable retirement. However, with the unprecedented movements of the UK base rate, thousands of pensioners are now contemplating how they will survive without up to a third of their income.”

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