LONDON — The UK announced Friday that it will start paying off part of the debt it took on to finance World War I.

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Consols were issued by Chancellor Winston Churchill in 1927 partly to refinance National War Bonds. The consols are perpetual bonds that pay 4% interest on the face value each year for all time.

The £218 million repayment is a fraction of the overall £2 billion still owed from the Great War, which took place between 1914 and 1918.

As well as war bonds, some of the bonds being redeemed go back even further, dating to the 18th century and the financial crisis of the day — the South Sea Bubble. The then Chancellor of the Exchequer consolidated the capital stock of the South Sea Company.

Others relate to the Napoleonic Wars, the Slavery Abolition Act and The Great Famine in Ireland.

Hogarthian image of the South Sea Bubble Image: Wikimedia Commons Edward Matthew Ward

By redeeming the bonds now at a lower interest rate than 4% and issuing debt for a shorter, defined period of time, the government can save the British exchequer a significant amount of money over the long term.

Most of the consols are held in small sums with only 11,200 registered holders of the bond, 92% of those holding less than £10,000 each.

There are seven other undated UK government bonds currently outstanding.