OAPs laughing all the way to the bank

There goes inflation:

INFLATION in the UK has dropped to its lowest figure for over a decade and economists believe it will decline further still.

Inflation fell to one per cent in November as measured by annual growth in the consumer price index, according to figures released yesterday by the Office for National Statistics (ONS). It marks a drop from 1.3 per cent inflation in October.

The annual rate of inflation was last one per cent in September 2002.

That makes pensioner bonds, due to launch in January, even more attractive.  A 2.8% return on a one year investment is not to be sneezed at.  The 4% return on three year bonds is less attractive, as the interest payment is only made after the full three years have elapsed (at least according to the BBC's money box).

Update:  More here.