Treasury takes index-linked gilt route

The Treasury has launched an assault on defined benefit pension schemes, or long-term savings, as we...

The Treasury has launched an assault on defined benefit pension schemes, or long-term savings, as we also know them, through the index-linked market. The good news is that while this is information worth knowing, as retail investors we can hope to avoid it. In September, the Treasury issued a 50-year index-linked gilt (ILG), with a coupon of 1.25%, which matures on 7 December 2055. It is new in every sense of the word because we have never had a 50-year index-linked issue, although there have been conventional gilt and bond issues with this maturity. It was placed in the market at 1.11%...