§ Ms. Abbott
To ask the Chancellor of the Exchequer how much a person would have to have in savings at current interest rates to generate income of(a) £3,000 per year and (b) £5,000 per year; how many people have savings at these levels; and how many of them are pensioners.
§ Mr. Ryder
Savings of £20,450 and a gross interest rate of 11 per cent., the current rate of return on a 90 day building society investment account of between £10,000 and £25,000, would yield income of £2,250 in 1990–91, the equivalent of £3,000 gross to a basic rate taxpayer. The corresponding level of savings for an income of £5,000 gross would be £32,600 with a gross interest rate of 11.5 per cent.
Estimates of the number of people with investment income (including interest on savings) of (a) more than £3,000 and (b) more than £5,000, in 1990–91 are given in the table.542W
Gross investment income, 1990–91 £ Aged under 65 (millions) Aged 65 and over (millions) Total (millions) More than £3,000 1.5 1.1 2.6 More than £5,000 0.9 0.7 1.6
Estimates are based on a projection of the 1987–88 survey of personal incomes and are provisional. These estimates are subject to a large degree of uncertainty since some investment income on which tax is deducted at source is not reflected in the survey.