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Written question asked by Baroness Altmann (Non-affiliated) on Wednesday, 2 July 2025, in the House of Lords. It was due for an answer on Wednesday, 16 July 2025. It was answered by Lord Livermore (Labour) on Tuesday, 15 July 2025 on behalf of the Treasury.

Government Securities

Question

To ask His Majesty's Government what assessment they have made of the potential demand from defined benefit pension funds and insurers for new issuance of Government bonds aiming to match pension liabilities or annuities and linked to (1) consumer price index, (2) limited price indexation and (3) life expectancy in the United Kingdom.

Answer

The Government consults primary dealers and gilt investors regularly to understand their needs, taking that feedback into account when designing the gilt financing programme. The gilt market is deep and liquid and enjoys strong demand from a well-diversified investor base.

Issuing new types of gilts risks fragmenting the market, which would not be consistent with the government’s debt management objective to minimise the long-term cost of financing. Long-dated and index-linked gilts are already very effective assets for defined benefit pension funds and insurers and allow them to hedge long-term liabilities. This is reflected by the high levels of demand for these products from those sectors.

The government keeps the introduction of new debt instruments under regular review. Any new instrument would need to meet value-for-money criteria, enjoy strong and sustained demand in the long term, and be consistent with wider fiscal objectives.

Secondary information

Type
Written question
Reference
HL9030
Session
2024-26
Subjects
Annuities Government securities Pension funds
Link
View this Written question on www.parliament.uk