by Dr. Ros Altmann
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Dr Ros Altmann, Director- General of Saga, comments on today's report from the Treasury Select Committee on the impact of QE on pensioners:
Quantative Easing (QE) is a massive monetary experiment that has not clearly boosted the economy as intended but instead has boosted inflation and damaged pensions, impoverishing many pensioners. The Bank of England's attempt to aid the economy with QE is akin to a doctor applying medicine to cure a patient without considering any of the side effects.
These damaging side effects are likely to have worsened the economy. Inflation has definitely dented consumer confidence and QE has worsened pension deficits, forcing firms to spend more money on their pension schemes instead of their businesses. Well over a million pensioners have also locked into lower lifetime incomes when having to buy annuities at artificially depressed rates.
Buying gilts with newly created money is a recipe for more disaster, it is not an economic cure, and it merely shifts the pain of over indebtedness forwards and sideways across generations without tackling the underlying problem. The following measures could help to rectify these damages caused by QE: