WORRIED pensioners have said their money is better off under the bed than in a bank, after news the Bank of England cut interest rates to just 1.5 per cent.

Many retired people and pensioners across south Essex say they rely on the interest from their savings to top-up their pensions.

Any homeowners with variable rate mortgages are also furious many banks are not expected to pass on the cuts to borrowers.

Michael Hadley, 66, of High Street, Canvey, is just one of many who has seen his savings income dwindle to almost nothing.

He said: “I rely on that money, all pensioners do. We don’t get a lot else.

“I might as well put it under the bed really. I feel like taking it all out and spending it because I don’t get anything for it leaving it in the bank.”

The Conservative Party has responded to falling interest rates by promising to abolish tax on savings income for all basic-rate taxpayers.

Tory leader David Cameron also promised to lift personal allowances for pensioners by £2,000 a year.

Currently the personal allowance for over 65s, is at £9,030 and pensioners do not pay tax on any income up to this amount.

However, Mr Hadley, a retired port worker who used to work at Tilbury docks, is not convinced. He said: “At best that would mean it will be over a year before anything changes, and that’s a long way off.”

Rita Weiss, secretary of Southend and District Pensioners’ Campaign, said the interest rate cut was yet another blow to elderly people. She said: “We are concerned obviously, especially with everything else going up.

“Prices have gone up like mad, wherever you go, and the interest on our savings is what we rely on.”