Dave Hedgehog Posted March 24, 2009 Share Posted March 24, 2009 Why would they. Unless the IoM decides to invade Jersey the Gov't doesn't really need the extra funds that issuing bonds would provide. In fact it would be an additional risk to the taxpayer should the gov't efforts to invest the surplus cash go tits up. Link to comment Share on other sites More sharing options...
Slim Posted March 24, 2009 Share Posted March 24, 2009 Why would they. Unless the IoM decides to invade Jersey the Gov't doesn't really need the extra funds that issuing bonds would provide. In fact it would be an additional risk to the taxpayer should the gov't efforts to invest the surplus cash go tits up. Well for a start, the govt cops flak for dipping into reserves and pension funds for cap projects. A bond would stop that. Link to comment Share on other sites More sharing options...
Gladys Posted March 24, 2009 Share Posted March 24, 2009 IOM Govt isn't allowed to borrow is it? I don't quite know who allows this or not, but that is the credo we hear from CM etc. Link to comment Share on other sites More sharing options...
bluemonday Posted March 24, 2009 Share Posted March 24, 2009 Yet the MEA does. Link to comment Share on other sites More sharing options...
oldmanxfella Posted March 24, 2009 Share Posted March 24, 2009 IOM Govt isn't allowed to borrow is it? I don't quite know who allows this or not, but that is the credo we hear from CM etc. As I understand it the government can happily borrow but it can't legally / constitutionally run a budget deficit. It has done one bond issue in the past (the Water Board) where IOMG debt was sold in the market. As I understand it that is where the Islands AAA rating originally came from as it had to have its credit risk assessed as part of the Bond issue. http://www.gov.im/lib/docs/cso/plan/waterauthority1.pdf There would be nothing wrong with the government doing other bond issues (in fact I'd be amazed if they have not already considered it over KSFIOM) as it has a good credit rating and the fact that it legally cannot run up a budget deficit as a government is likely seen as a good sign in the market - it would have to cut government services and up taxes and do just about anything else before it could default on any debt it had to bondholders as it couldn't run up a deficit to pay them out. Edited: spelling Link to comment Share on other sites More sharing options...
Penguin Posted March 24, 2009 Share Posted March 24, 2009 I'm seriously giving thought to bunging all of my savings into premium bonds now. Given that you get sod all interest nowadays I reckon there is a better chance of a return from good old ERNIE Anyone else done this? YUP. No tax, no hassle - easy to deposit and withdraw and I've had about a grand in prize money this past year - and there's always the chance of the monthly envelope arriving with 'The Big One' enclosed. Safe but with a hint of excitement too! Ditto. Unfortunately ERNIE has been hit by low interest rates as well. One £1m Premium Bond prize axed! Clicky. Basically the prize money has been halved. Bummer. National Savings & Investments also do a 100% UK Treasury guaranteed index linked savings product (max investment for that product = £15K). And 100% guaranteed fixed interest savings certificates (max = £15K). Granted you will have a potential IOM tax liability - but your money is guaranteed by the UK Treasury and the with low interest rates it will not be much tax. Although it is irritating that anything from NSI should have an IOM tax liability given that there are no equally safe investment products available here. So with that + Premium Bonds (IOM tax free) -- well that's £60K that you can get 100% safely guaranteed by the UK Treasury and not even have to wonder how good the IOM scheme is. Assuming you are confident that sterling is a good enough bet. ETA: until the storm is over ! The index-Linked funds tie you in between 3 and 5 years and as inflation on the island is currently above UK inflation (which what it is obviously linked to and will probably hit deflation at least temporarily) you may get stung since you have to pay tax here. Premium bonds used to pay out at an average return of 3,5% per annum. Not sure if this has been reduced now though but at least it's tax free. Certainly worth the first bung of whatever savings you have. Link to comment Share on other sites More sharing options...
Sebrof Posted March 25, 2009 Share Posted March 25, 2009 Premium bonds used to pay out at an average return of 3,5% per annum. Not sure if this has been reduced now though but at least it's tax free. Certainly worth the first bung of whatever savings you have. Not sure that I agree with this. It's statistics again. Because one or two people win a million quid (or whatever), the overall average payout is pushed up to whatever it is (by the way, it's much less than 3.5% now). But most people won't win a million quid, so the return they get is going to be rather less than 3.5% (or whatever it is now). It's pretty hassle-free, though. S Link to comment Share on other sites More sharing options...
Sebrof Posted March 25, 2009 Share Posted March 25, 2009 IOM Govt isn't allowed to borrow is it? I don't quite know who allows this or not, but that is the credo we hear from CM etc. Until recently, local authorities on the IOM issued their own bonds. My father lived off his interest on Peel Town Commissioners' bonds for years. Then some smart-arse stepped in and stopped it. S Link to comment Share on other sites More sharing options...
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