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Chancellor to launch Budget consultation on 100-year ‘super bonds’

Chancellor George Osborne is considering the introduction of new long-term bonds, which would not be repaid for 100 years or more.

The so-called ‘super bonds’ would allow the UK to save billions of pounds in debt repayments by locking in a low interest rate, and could help to protect the UK from future market instability.

A similar system was put into place following the First World War, when Britain issued perpetual gilts, on which the capital is never actually repaid and interest is charged indefinitely.

A Treasury source commented, ‘This is about locking in for the future the tangible benefits of the safe haven status we have today. The prize is lower debt interest payments for decades to come’.

The Chancellor is set to announce a consultation on the super bonds in the forthcoming Budget.