Exchequer stocks - what are they?

Bobsteve

Hi I was wondering if anyone can help me. I have an exchequer stock certificate from my nan which I started getting money from when she died. It says that the treasury can redeem in dec if they want and I wanted to know if there is any way I can? And also what happens to my payments after dec if it it jus left to continue. I have no idea how they work so any idea/explanation would be great!
Thanks

JoeCrystal

Look like you are referring to 12% Exchequer Stock 2013-2017. The Redemption Date is 12 Dec 13. Basically, it then pays you nominal sum. So if you got £1000 nominal then you get £1000 back.

In that case, you would not get any more income.

Cheers,
Joe

Ark_Welder

Sounds like the 12% Exchequer Stock 2013-17, a UK government gilt. Given the size of the coupon (12%) I would be very surprised if this was not redeemed in December. But in the event that it isn't then you would continue to receive the interest payments until the gilt is finally redeemed, with December 2017 being the latest that this can happen.

Bobsteve

Thanks, would the payments after dec 2013 remain the same then and is it only down to the treasury whether or not it can be redeemed

Ark_Welder

If the gilt is not redeemed in December then the interest payments will remain the same. After December the Treasury can redeem at any time after giving 3 months' notice - but that might appear only in The London Gazette. But it will be redeemed in 2017 at the latest.

You do have the option to sell the gilt if you no longer want it. DMO: Buying and Selling Gilts. But if you do want to sell and can wait until September-time, then there might be an announcement that the gilt will be redeemed. If so, you will save on the costs of selling, although you would need to compare that saving with how much you might get by selling now (latest clean price is £105.37), which is likely to be above what you will get back then (redemption price of £100). So an extra fiver for each £100 block that you own. But by selling now you will get only 10-15 days' worth of interest @12% p.a., whereas by holding until December you will get almost 6 months' worth of interest. But in 6 months time you might have to decide again whether or not to sell if the gilt is not redeemed then.