The Bank of England confirmed a full three years of record low 0.5 per cent interest rates today as opposition grew to the quantitative easing scheme that pensions funds claim has reduced scheme values by £90billion. The policy is producing victims with savers suffering returns close to zero. The effect is particularly tough on pensioners who rely on savings to supplement their income.
And current and future pensioners also suffer because QE makes funding final salary scheme more expensive and reduces the incomes retirees can expect when they cash in their pension pot. The National Association of Pension Funds (NAPF) said that £90billion has been knocked off the value of final salary pension schemes due to £125billion of quantitative easing in the past six months. That is on top of £180billion in additional finding costs arising from earlier QE.