Consol (bond)

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Consols (originally short for consolidated annuities, but subsequently taken to mean consolidated stock) was a name given to certain government debt issues in the form of perpetual bonds, redeemable at the option of the government. They were issued by the Bank of England and the U.S. Government. The first British Consols were issued in 1751.[1] They have now been fully redeemed. The first U.S. Government Consols were issued in the 1870s.

U.S. Government 4% Consol Bond


In 1752 the Chancellor of the Exchequer and Prime Minister Sir Henry Pelham converted all outstanding issues of redeemable government stock into one bond, Consolidated 3.5% Annuities, in order to reduce the coupon (interest rate) paid on the government debt.

In 1757, the annual interest rate on the stock was reduced to 3%, leaving the stock as Consolidated 3% Annuities. The coupon rate remained at 3% until 1888. In 1888, the Chancellor of the Exchequer, George Joachim Goschen, converted the Consolidated 3% Annuities, along with Reduced 3% Annuities (issued in 1752) and New 3% Annuities (1855), into a new bond, 2​34% Consolidated Stock, under the National Debt (Conversion) Act 1888 (Goschen's Conversion). Under the Act, the interest rate of the stock was reduced to 2​12% in 1903, and the stock given a first redemption date of 5 April 1923, after which point the stock could be redeemed at par value by Act of Parliament.

In 1927 Chancellor Winston Churchill issued a new government stock, 4% Consols, as a partial refinancing of the National War Bonds issued in 1917 during World War I.

Timeline of 2.5% Consolidated Stock[edit]

Year/Date Description
1751 Consols first issued
1752 Consolidated 3.5% Annuities
1752 Reduced 3% Annuities
1757 Consolidated 3% Annuities
1855 New 3% Annuities
1888 National Debt (Conversion) Act 1888 (Goschen's Conversion)
1888 2​34% Consolidated Stock
1903 2​12% Consolidated Stock
5 April 1923 first redemption date
1923 2​12% Consolidated Stock

Final redemption[edit]

On 31 October 2014 the UK Government announced that it would redeem the 4% Consols in full in early 2015.[2] It did so on 1 February, 2015, and redeemed the 3​12% and 3% bonds between March and May of that year. The final 2​34% and 2​12% bonds were redeemed on 5 July 2015.[3] Section 124 of the Finance Act 2015 made the legal provisions for the ending of the Consol.[4]

References in literature[edit]

Given their long history, references to Consols can be found in many places, including Pride and Prejudice by Jane Austen, David Copperfield by Charles Dickens, Howards End by E. M. Forster, Vanity Fair by William Makepeace Thackeray, Of Human Bondage by William Somerset Maugham and The Forsyte Saga by John Galsworthy.

See also[edit]


  1. ^ "consol", The Free Dictionary, retrieved 2010-04-09
  2. ^ "UK to repay part of perpetual WWI loans". Financial Times. 2014-10-31. Retrieved 1 April 2019.
  3. ^ ""About Gilts"". UK Debt Management Office. Archived from the original on 2016-11-10. Retrieved 2015-11-04.
  4. ^ Finance Act 2015 s. 124

External links[edit]