Pensioner Bonds will Cost as Much as Bedroom Tax will Save – Biggest Pre Election Bribe in History

CF Dillow Today

Which interest rate would you rather borrow at – 4% or 0.6%? It sounds like a moronic question. Not if you’re the Chancellor, it’s not. In launching pensionerbonds yesterday which pay 4% pa over three years, he is choosing to borrow at a much higher rate than the 0.6% charged by the gilt market.

This is costing the tax-payer money. If, as is likely, all of the £10bn bonds on offer are bought, the government will be paying almost £300m a year more in interest than it would if it borrowed in the gilt market*.

To put this in context, it is three times as much as the government is saving from the cap on benefits. And it is almost as much as it is saving from the bedroom tax.

One thought on “Pensioner Bonds will Cost as Much as Bedroom Tax will Save – Biggest Pre Election Bribe in History

  1. I’m kind of baffled by this. Doesn’t selling Bonds to pensioners INCREASE the National Debt? And make the deficit bigger?
    So basically the Conservatives are doing what they complain that Labour will do. Only they are doing it in a more expensive way, and costing the taxpayer more?

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