SWM inherited a 3.5% War Bond when her ole mam threw a seven in 2009. It was for £300 and we got a cheque for £7.00 every 6 months........as did she before us.'
Anyway, we got a letter some time ago to say that the bond had run it's course and we would get a cheque/warrant in due course. Today she got a warrant for £400....nice, plus a residue of interest just over 3 quid ! It'll go in the holiday/caravanning pot together with my wages........already amassed well over a grand...enough to pay for the main holiday and a few weekends.......with more to come from work.
Does anyone else have one of these ? It would be nice to know the background of these things. I assume it's issue date was in 1915...helping towards the war effort. I don't know which side of her family it came from but it must have been a substantial chunk of money in those days........both ' grand-dads ' at that time were engine drivers with The Cheshire Lines Rly.
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>> I don't know which side of her family it came from
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Sorry, can't resist, you mean the British or the German side?
I'll get my coat
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A hefty sum indeed in 1915, nearly £60K in 2014 terms, according to this:
www.bankofengland.co.uk/education/Pages/resources/inflationtools/calculator/flash/default.aspx
The value of the coupon on a bond presumably declines by the same factor, the snag with all fixed interest investments.
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Ve hav vays of making you larf !
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Yes, especially as I got it wrong. More like £27?
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Yes, I've just received mine.
Inherited from my father, and his father. They were originally issued in 1917, and people were encouraged to buy them as a patriotic gesture to finance the war effort.
They were undated, but issued, so my family always claimed, on the understanding that they would be redeemed after the war. It always rankled with them, and of course the true value of the bonds dwindled.
My £500 would have bought a modest house in 1917.
Still, the shells probably made a nice bang.
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The Govt have decided to redeem 3.5% War Loan and a number of other undated Consols etc. all issued many years ago. They'll refinance the borrowing at current, substantially lower, rates.
The losses incurred where people invested in undated stock, or Trustees invested in it for them, only for the price to fall when interest rates rose was a matter of political controversy for many years.
hansard.millbanksystems.com/lords/1960/mar/08/losses-on-undated-government-stocks
I seem to remember The Public Trustee, for whom I worked for part of my Civil Service career getting a licking in the seventies over having made such investments.
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The 1917 date might well indicate that they were bought by SWM's great grandparents on her mother's side.
They lost a son, James, 31 yrs on July 7th that year. May have been a sort of ' in memoriam ' purchase to do their bit .
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I wonder how much was paid out for this bond in total in today's money and compared to what the original bond cost. We won't know. I bet paying out early on these years ago would have saved the Exchequer.
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Well, it was 3 1/2% every year from 1917 to 2015, so you could convert each year into today's prices and add them up?
But as Keynes pointed out, the point of war bonds isn't really to "pay for the war". That's easy - the government just prints more money and requisitions things.
The difficulty is to contain the resulting inflation. Anything that stops people spending it and putting it back into the economy will do. It's just that persuading people to buy bits of government paper, or hammer nails into an effigy of Hindenburg, seems more patriotic.
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>> Well, it was 3 1/2% every year from 1917 to 2015
Appears it was more complicated than that. A piece by William Keegan on the Guardian website refers to it being originally issued at 5% with a prospect of redemption in the thirties.
www.theguardian.com/business/2015/mar/08/hundred-year-loan-long-term-economic-plan-budget-george-osborne
(WK goes on to say a lot more as well).
This Wiki item explains more:
en.wikipedia.org/wiki/War_bond#United_Kingdom
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Some dosh arrived. - commerdriver
