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Gordon Brown confirmed the Debt Management Office is to start issuing 50-year gilts. This is an important step in dealing with supply-side issues which affect the annuity market. There is a serious shortage of financial instruments to back annuities and, with demand set to grow massively and with insurance funds, occupational pension schemes and annuities all competing for this limited supply of gilts, this move looks like good news. The unanswered question is what kind of premium will be paid. Given the reverse yield curve for existing 15-year gilts, the terms may not look very attractive but presumably the market will find its own level. Buried in the small print of the Treasury press notices, it is confirmed that the Pension Protection Fund will not be allowed to pay any tax-free cash. This strengthens the argument that scheme members facing the prospect of having their benefits absorbed into the PPF would be well advised to try and get their benefits out of their DB scheme before PPF membership becomes an issue. Think of it like a car crash – you may have a safety belt on but it still better to avoid going there at all, if you can.