Debt Management Office

Bernard Abrahamsen offers alternative sources of index-linked income.

The Debt Management Office has launched a consultation with investment firms on plans to cancel £7.3bn of gilts from the Royal Mail Pension Plan.debt

International investors are buying record amounts of UK government bonds as the Bank of England's £75bn QE programme spurs demand, with the yield on the 10-year gilt hitting a new record low.

The Treasury is set to re-open its long dated syndicated gilt offering this month, laying out more than £8bn of government loans for direct purchase by pension funds.

Stephen Jones of Kames Capital asks how schemes can surmount the historically large gap between inflation and interest rates

The government has said it will not issue CPI-linked gilts in 2012-13, saying the move would not be cost effective and would involve "a number of risks".

The DMO should issue CPI-linked gilts on shorter durations of ten to 20 years to match schemes' shorter-dated CPI-linked liabilities, two of the industry's biggest bodies say.

Insurers will be forced to increase buyout prices in the medium term unless CPI-linked instruments are issued in the coming months, Punter Southall says.

The Debt Management Office has "no plans" to introduce CPI-linked gilts to help schemes hedge inflation, PP can reveal.