um, seems easy to me. full tax relief on first mortgage, top rate on second. that would take care of the buy to let smug mugs

Tony Stanton, Barnstaple, England

Good point, well made. A problem with democracy is that it's often a popular move for governments to absolve individuals (who are also voters) of responsibility for their own actions, such as getting into debt. And to raid the savings of responsible people to enable this to happen.

Jessica, Reading, UK

Good point, well made. A problem with democracy is that it's often a popular move for governments to absolve individuals (who are also voters) of responsibility for their own actions, such as getting into debt. And to raid the savings of responsible people to enable this to happen.

Jessica, Reading, UK

Bang on. All the guff about "hard-working families" trying to "hang on to their houses" ignores those of us who are responsible enough to have realised that we can't afford a house, let alone a family and have spent the last decade working to get some sort of stability. That worked well...

James, London,

I have saved and worked hard and paid taxes but not bought a property but I now realise I should have borrowed to the hilt not gone to work and scrounged off the state. Infact that is still the message being sent to me. I want to take my savings off shore invest in another economy and then scrounge

Duncan, london, UK

These cuts are blatant electioneering and no doubt rates should really still be about 4%. Trouble is, after the election rates will have to spiral to around 10%.......oh dear, we've seen this all before haven't we?!
We know the economy needs some stimulus but this is all too much and it stinks....

emma moore, oxford,

Interest rate cuts are necessary to keep what's left of the economy going. No British saver is going to be better off with high rates in the long run - they'll end up with no income to save. And don't worry about inflation, which is about to drop like a stone.

Andy, london, uk

I advise you all to vote with your feet and leave GB and his cronies to their sorry delusional world. I live in a third world country now but i am better off all the same.

yemi fowora, Lagos, Nigeria

Peter - the BOE is controlling inflation - it needs to stimulate the money supply in order to stop the economy's recession spiralling out of control. Equally is it like being kicked in the teeth but the consequences of supporting the sensible minority instead of the majority are disastrous for all!

Joe, Leamington Spa, England

I'm in pretty much exactly the same position (in my twenties, working two jobs and saving like crazy in the hope of one day being able to afford a house). The only consolation is that while my savings may be shrinking by 2% a year (inflation 4%, interest rate 2%), house prices are going down faster.

Paul F, South East,

The BOE MPC has One and i repeat "ONE" Mandate - To Control inflation.
UK Inflation is officially 4.5% so what are they doing lowering rates to 2%? They are bowing to political pressure and basically making themselves redundant.

Peter, Aldershot, UK

Your savings only count against you when claiming benefit when they're in the bank. Don't declare what's under the mattress. If there's no interest there's no advantage in keeping them in the bank.

quentin, reading, uk

Banks tell us that they require people to save so that they have money to lend .
So why are interest rates to savers being cut which must be a dis-insentive for savers .
Banks have fallen into the same trap as mortgage holder-they cannot repay world finance on borrowings on depreciating assets.

JAMES B, montrose, scotland

Turkey's nice and they have a number of Islamic banks (Bank Asya, Albaraka Turk, etc) which pay profit-share rather than interest but then so does the Islamic bank of Great Britain. Pop down Edgware Road and move your account, love.

RW, Istanbul and London,

If you have money they want to take it from you. If you dont have any money, they give it to you for free. Thats why the UK is the Benefits Country of the World.

callum, Liverpool, UK

Boo hoo you couldnt afford a deposit on a house, journalist wages too low or your sight been aiming too high. Anyway with dropping house prices your now in the prime position to pick up a house chearper than its been for ages so get real.

df, edinburgh,

Trace the history of the banks' position. This all started when unsound loans to 3rd world dictators were forced out of banks and then defaulted. We paid the price in cheap credit (asset on the bank's balance sheet) and now all has collapsed in tears. The left-wing politics of redistribution at work

KR, Stockport,

Natalie

If you look at your finances in real detail, you would find that even with an interest rate of 4.5% you need to have in excess of £100,000 for the interest to make a blip on what you are saving. Instead of the UK obsession with property, look at the positives -full financial independence

Peter, London,

Take your money out of the bank and hide it under the mattress! That way the interest you earn will be practically the same, but at least you won't risk using it when there's a run on the bank!!

Helen, Sheffield, UK

Excellent summary of the skewed, warped policies that Gordon Brown promotes and that have already wrecked the economy and may soon ruin the currency.
When are renters, savers, pensioners and homeowners (w/o mortgages) going to get a break? Deflation will help our cause but GB seems bent on inflation

MB, Edinburgh,

By saver, one means someone who puts their money in a moneylending institution. Interest earned is always from another's debt, whether that debt is personal or from the government. If you want to be respected for your investments then invest in something that leads to progress.

Mark Taylor - Lazy Bloke, Frankfurt, Cambridge

I haven't been able to get a graduate job so I have been consoling myself with the fact at least I was saving for when I could get a house.

Labour does absolutely nothing for single 20-30 year olds. I feel like I'm getting the short straw because I have been saving for the future.

Catherine, Leeds,

Totally agree... spent years spending carefully, building up savings, while my chances of buying a house got smaller and smaller. Now that I've been made redundant, my savings just go against me when it comes to claiming benefit.

Feel cheated.

Sharrie, Belfast,

Thank you Ms Haynes for expressing so well the anger of the saving classes. I fear this financial crisis is going to be "solved" in the usual way with the wholesale confiscation of savings and repudiation of debts through inflation and taxation. Buy gold and baked beans.

P Freeman, Harrow, Middx

The government prints money to cover its own excessive spending. It has now reduced the interest rate below the rate of inflation. The loss of value in your savings deposit reappears from the government's printing press; it is a tax on savers. The result will be hyperinflation. just like Zimbabwe!

Richard Cooper , Dunstable,

At times I think that so much in the UK is going in the wrong direction. Where else in the world can you get a house, have a family, medical care provided, yet never have to be accountable or responsible by getting a job. It's not sustainable. One day, like the crisis we're in now, it'll fail.

Lewis Blight, Nottingham, UK

What has the government got to do with interest rates? Anyone who remembers the late 90s knows that it's the Bank of England that sets them independent of government. This is in order that the government can't meddle for electoral advantage. Banks are forced to pass it on as they are supposed to.

Miriam, London,

Agree jd and, are you Jon Dummer as in JD Blues Band? saw you at the Liverpool Stadium in the 70s. Still going?

mark, bethesda, wales

100,000+ of us young Brits should join forces and negotiate terms for a mass emigration to another state. The next step for the govt here is the explicit printing of money, this will dilute the real value of our hard won savings. Then come the tax hikes. Mr Brown has wrecked the UKs future.

john p-t, reigate,

What's wrong with rent? Mortgage is effectively the same as rent for most of your life, then when you pay it off you are old and retired. And then you die. And the government taxes it again. People obsess about very strange things in this country.

Jim, Cambridge, UK

I'm heartily sick of the morality arguments that go "savers good" ,"borrowers bad". This isn't about morality, it's about economics. You can't have savers without borrowers, otherwise who's paying the interest on your savings? And at least asset prices have now fallen, so your savings buy more!

Andy, London,

Natalie Haynes you've said it all.Thrift is a word seldom used today but in terms of saving it mean for a target purchase or for a rainy day. If personal and corporate savings do not cover fixed investment we either inflate ad infinitum or end up in hock to forign lenders, nether a pleasant prospect

Croft, Ray, Hermanus, Cape Province,, SOUTH AFRICA.

Borrow beyond your ability to pay, so you can life the high life. If you suddenly find you cannot afford it, then never mind because Gordon will bail you out while shifting the blame onto those dirty, nasty people who rent houses, he'll even kick them out of their houses for you.

SJ, Jarrow,

As pensioner and my income has halved while food and heating prices are increasing,we wont forget when the election comes around.

Devo, Haslemere, Surrey

One more "kick in the teeth" from the Thieving Fist: not only is our rate of interest lower than the (official) rate of inflation, meaning that at current rates we are LOSING 2.5% on our savings each year. But the government has the audacity to TAX us on the 2% 'earning'!

Dominic Graham de Montrose, London,

what a crazy world we live in - capitalism makes no sense at all - it is based on infinite growth but we live in a finite universe - we need to stop being so obsessed with wealth - do something good for someone else - give blood - you'll feel good about yourself.

jon dummer, belton, uk

i agree stephen, you get 2% interest above inflation- so you are still making money. But didn't you see that we were being forced to rent, like locking the wealthy into the housing market through sipps but it inflated it even further. Dont whine about a little rate cut when we know houses'll plummet

mark, bradford,

Well said Natalie! As a saver trying to scrimp together enough for a deposit on my first house the policies of this government are more and more galling. The moral hazard here is clear - build up huge debts / buy into an obvious asset bubble on a grand scale and the Government will bail you out.

Ian, London, UK

I couldn't agree more. Instead of saving I should have mortgaged myself to the hilt with a self cert..

John, London, England

I suspect that there is a hidden government agenda on interest rates. The banking crisis has left record levels of investors in cash. I think talk of helping borrowers who already have relatively low interest rates is a smokescreen. The real agenda is to get savers out of cash and stop hoarding it!

Matt, Amersham,

Vast numbers of pensioners with money in the building society have had their income slashed to less than the rate of inflation. Pensioners are the section of society most likely to turn out at elections. Hmmm...

ben foster, wokingham,

A good time to get your savings out of Sterling anyway, and well away from Gordon Brown's reach. Get a foreign bank account and get your savings into euros or swiss francs or yen before the pound plummets any further

Iain, Tokyo, Japan

I have a pension income. It pays my bills and I have a bit left over each month. Result happiness. I haven't got time to whinge about interest. Get a life!!

Brian Faulkner, Bridgwater,

"........there are more savers than borrowers in this country. "
Hopefully the savers will remind this Government of that fact at the next election.

Clive, Gloucester, UK

I am redundant at the end of the year, this month! There are few prospects for jobs and now I find that my redundacny payment will fall in value as savings rates are lower than inflation.

Oh and my redundancy will be taxed to pay for the bank bail out. Double whammy gordon, thank you.

Mike Hewlett, NEWPORT, Wales

This Labour government thinks nothing of penalising the affluent & prudent, reason: they are not their core voters. They would rather waste the country's wealth propping up unnecessary public sector jobs and a ballooning welfare budget. They are unashamedly using your money for political ends.

Brian Roberts, Oliva, Spain

At least you have some savings! What about people in industries which are slowly collapsing? Their revenues are drying up, their savings are gone, and they have no way of making ends meet. Look on the bright side.

iain, bedford, uk

Well what about removing income tax on bank account interest, it would encourage people to save more and remove the neccesity to reduce the vat level.
Simple, Hmm-joined up government thinking, i think not!!!

Stuart , Barnsley, UK

No way can mortgage or credit card debt have led to the trillions upon trillions of debt we tax payers are being asked to fork out around the world. This is the biggest scam in history.

Robin, Geneva, Switzerland

Socialism isn't about prudent people with savings, it is all about susidising the improvident. Taxing interest on savings and pension fund dividends is part of Labour's idea of "soaking the rich" and the pips have now squeaked - Mr. Denis Healey.

David Cotterell, Cheltenham, Uk

When will the government realise, there are MORE savers than mortgage borrowers, and they HAVE VOTES!

David Vinter,, Louth, Lincs., UK.

Hear Hear.

I am in exactly the same situation - why should the prudent be penalised because of the reckless? An interesting point about there being more savers than borrrowers in the UK. So which political party is going to be the party for us?

A Sherman, London,

Clearly savers have been neglected in the rush to "save the banking system". To highlight this point, the banks offering the lowest interest rates should be targetted and savers unite to withdraw their savings on a particular day. That would remind Mr Brown as to how important savers are.

Keith Howard, Wisbech, England

Natalie. Be sensible. withdraw your savings and emigrate. Britain had no future 30 years ago. I got out with my family and have never looked back. We live very near to several housing estates full of people from Britain who saw the light. The local shopping centres are abuzz with Britsh accents.

F Rasmin, Brisbane, Australia

Our best hope now is deflation, house price deflation has begun but it stall has 30-40% to go. Sit on your savings, invest in low risk fixed rate bonds, in two years there will still be plenty of property auctions.

Dave, Liverpool,

Spot on! This is a disgrace. I'm all for broadly re-distributive taxation but this is (effectively) taxing the poor to pay for the lower AND upper middle earners. Ridiculous. If you buy high, you shouldn't moan if you need to sell lower. Capitalism + artificial market inflation anyone?

Paul, Colne,

Steve of Norwich - spot on. Stop whining Natalie. As a homeowner I take the rough with the smooth, and why do you think your savings puts you on the high moral ground ? And why should I pay you way over the odds for your money ? And 2% is about right in a country which makes zilch anymore.

david, Poole, UK

In a democracy it's always best to do what the majority do even if it's stupid. The government will always protect it's voters.

The greatest boast of my MP is how he's prevented house building (and so kept up prices) because that's what most voters want.

quentin, reading, uk

When you have a bunch of has-been lawyers ruling the roost in the government and no experience of economics what can you expect from them to do! Instead of putting all of us in the poor house with their crazy fiscal policies a bit of 'prudence' would have been better.

Louis, Liverpool, UK

I didn't buy property because "its my pension", or equity withdraw to buy a car, buy a flat screen TV to keep with the jones, I didn't take crazy gambles with peoples money as a banker, I've not been on benefits.

Yet who's going to pay for all this waste and greed. Me!
Is that FAIR Mr Brown?

Scott, Aberdeen, UK

Those best off under this goverment are those that own no property, or who have borrowed more than they could afford, have kids they can't support, and those on benefits.
Tough if you've worked and saved hard as you now can't sell your house and can't retire because your pension isn't worth a cent.

P Hunt, Stratford-upon-Avon, Warwickshire

Arnold - property may be getting more "affordable", but presumably the amount mortgage lenders seek as a deposit is growing, while the amount they will be prepared to provide is shrinking all the time. So it's an equation of pluses and minuses.

susie, London, UK

The 16% house price drop last year more than compensates for 3-4% less interest on your savings, so stop complaining. As markets move, there are better ways of investing money. Now might be a good time for stock market investment, for example. I'm in the same position but rolling with it.

Dan E, London,

I, too, feel cheated. I've been very careful with my money, didn't go on holidays for the last few years because my job was at risk, and didn't take out a mortgage. Now I've lost my last job, am trying to work freelance and am partially living off my savings - which earn bareley earn any interest.

Polly, London, UK

Excessive borrowing is the cause of this massive housing problem.
First time buyers like myself have spent 5 years saving and still can't afford a decent property!. House prices need to come down, simple. The sooner the government stops interfering and lets the cycle take it's course the better!

indi, London, UK

With bank interest coming down and inflation shrinking--why are we continually likely to be forced to pay out for huge hikes in council tax, rail fares and energy company charges,?

William Grierson, Kimpton, Herts

In good times, save, in hard times, save, interest is simply a nice bonus, and as Stephen says, low inflation and e.g.the cheap new car I just bought offset next years low savings rates. I've always budgeted on 2 per cent interest, and enjoyed the bonus of higher rates. But long term saving is best.

Paul Freeman, London, England

So buy a house in two or three years at half today's prices, and at your age, you still have many years to pay off that mortgage. So at least you're better off than fellow-sufferers 20 years older who faced paying top-rate income tax for life without ever being rich enough to buy.

Nick, West Devon,

I couldn't agree more. I have worked solidly for 6 years trying to build a deposit for overly price flats in South West London. The bubble has finally burst and I want the property crash to hit like never before. Assets go up AND down, why do people not realise this?? Labour's time is up.

Chris, London, UK

A word of consolation - flats are getting more and more affordable with each passing day .

Arnold Ward, Weybridge, Surrey, UK

The world is living a cuckoo land existence where the foolhardy and reckless rule the roost, while those who have been prudent and have chosen to save for their future are being gutted (financially and psychologically) by the actions of the governments to bail out the stupid.
The end of this is nigh

andrew, cagayan de oro, philippines

Money doesn't make money. Production makes money. We (the UK) produce nothing, therefore you must expect that your money will make nothing. Get real. Put your money into production or a foreign bank in a country which makes things. Stop whining. Enjoy the fact you have money. most people have none.

Steve, Norwich,

You can always pop out a few babies... a full time mother never has to worry about the rent. Or council tax for that matter.

Work part time and you'll actually be in a better position than you are now.

Howard, Manchester,

Natalie, I feel for you and can wholly sympathise with your frustration. It's wrong that we live in a system where the feckless are rewarded and prudence penalised. You can read into that you're also governed by the feckless and certainly not (despite years of assurances) by the prudent.

Dale, Australia,

I begin to wonder if this is the latest Government ploy to get us all spending. After all, there is no longer any incentive to save, is there?

Helen, Cheltenham, England

This government will go down in the records as Britain's absolute worst.

Bruce Robertson, Brighton, UK

I think you will find that when the next set of inflation figures come out-- that inflation is presently close to 0.
All that matters is the difference between inflation and your interest rate.

Stephen, London,

Couldn't agree more. The correct response to the financial 'crisis' wolud have been no response. On what basis is a 'vulture' wanting to pick up cheap property now any worse than a speculator buying a house he didn't need purely in the hope of a massive price rise 18 months ago?

Eric Skelton, Cardiff, Wales

Decisions should have been made 2 years ago when I sold 40% of my portfolio. I still made a massive loss on the rest. Although investing in fixed rate bonds and gilt edged. has helped I expected companies going bust, but the whole world is bust. anything can happen now and probably will.

ged, manchester,