Apparently, in the last budget, George Osborne announced that 100-year gilts were being considered as a way of raising money.
This is not good,..
Western economies rely on borrowing to move forward and use inflation and growth to reduce the effect of the borrowing i.e. like your house value goes up so your loan looks low and you salary has gone up too so it looks doubly low. It's all smoke and mirrors.
When there's growth, assets go up, people borrow against the assets and spend as consumers. That's not happening at the moment.
Issuing 100-year gilts, or bonds, defers the redemption for at least two generations but if you look at the returns they're likely to be rubbish at about a third of inflation (based on the last 100 years).
So who cares, nobody will buy them, right? Well, despite their posturing, pension companies may be forced into it (Government rules on investment security). So, end result, the value of your pension will drop. If you have a SIPP, the value of your pension will drop. If you take out an annuity they've already dropped 25% due to low gilt yields but they'll drop again.
Public pensions will be largely unaffected as you'll fund those from Council Tax increases using the money you no longer have!
Source
This is not good,..
Western economies rely on borrowing to move forward and use inflation and growth to reduce the effect of the borrowing i.e. like your house value goes up so your loan looks low and you salary has gone up too so it looks doubly low. It's all smoke and mirrors.
When there's growth, assets go up, people borrow against the assets and spend as consumers. That's not happening at the moment.
Issuing 100-year gilts, or bonds, defers the redemption for at least two generations but if you look at the returns they're likely to be rubbish at about a third of inflation (based on the last 100 years).
So who cares, nobody will buy them, right? Well, despite their posturing, pension companies may be forced into it (Government rules on investment security). So, end result, the value of your pension will drop. If you have a SIPP, the value of your pension will drop. If you take out an annuity they've already dropped 25% due to low gilt yields but they'll drop again.
Public pensions will be largely unaffected as you'll fund those from Council Tax increases using the money you no longer have!
Source
