Great Britain still carries debt from World War I—to the tune of about two billion pounds ($3.2 billion). But the U.K. has pledged to pay off £218 million of that debt by February 1 of next year. The plan: issue new debt with lower interest rates, Reuters reports.
Another chunk of debt, that the U.K. is paying off at the same time, dates back to the Napoleonic Wars, Reuters adds. This will be the first time the U.K. has opted to pay since the 1940s, because other forms of debt carried higher interest rates.
The debt that's being paid back takes the form of 4.0 percent consols—bonds that have no expiration date, Reuters writes. British citizens bought the bonds during World War I to help finance the war, and they were converted into perpetual bonds ten years later.
The British government is considering just paying back its debt in full in the future, but for now, the bonds that are being bought back are being replaced with new ones that carry interest rates with less than three percent—a much more attractive figure to the government than the five percent to 3.5 percent interest rates the bonds have assumed over the years. Today, just over 11,000 people hold the bonds, Quartz writes, and the government shells out about £136 million to them each year.
While the bonds are the first thing the government is tackling, Reuters adds, most of the debt is actually composed of a 1.9 billion pound War Loan from 1932.