Negative Rate of Interest & Income Drawdown

The following article should be chilling reading for anyone who wants to retire in the near future or has been financially prudent and hopes to supplement their retirement with disciplined savings which have accumulated over the years. http://www.bbc.co.uk/news/business-21589128 A negative rate of interest from the Bank of England to the major lending institutions would be unchartered territory in the UK. The article does not mention how those on income drawdown or coming up to an annuity purchase would be protected from the artificially depressed rates of interest. A major factor in the financial crisis was that Bankers did not price risk adequately and consequently made loans which with the benefit of hindsight were feckless. Another concern I have is that such a move would encourage yet more feckless lending which would require much greater Government intervention further down the road.

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