Pensioners plan Post Office picket over Pibs

Pensioners who invested their savings in bonds issued by the old Bristol & West Building Society are preparing to picket the Post Office over its joint venture with Bank of Ireland (BoI).

They are furious that Irish finance minister Michael Noonan, left, is considering exercising a power that would see UK pensioners lose around £40m of Bristol & West permanent interest bearing shares (pibs). The state is a 15 per cent shareholder in BoI, which bought B&W in 1996, but the bank has recently struggled and is trying to complete the last elements of a €4.2bn capital raising.

This includes potentially wiping out the pibs-holders, who are typically retirees who bought the high-yielding bonds to help them through their old age. The pibs pay out 13.375 per cent of their face value per year, meaning that they were particularly useful for people with few savings as they approached pensionable age.

Mr Noonan announced on Wednesday that he might exercise the option of wiping out these and other junior bondholders to raise the last €350m, despite BoI withdrawing a similar plan in the summer. He has given the pensioners a week to respond.

However, a core group of campaigners has been plotting to picket post offices in the event that Mr Noonan, left, carries through such a plan.

BoI signed a deal in 2004 to provide savings-account services to the Post Office, which was first made aware of the latest plans in September. A campaign spokesman said BoI was "unfit" to run UK savings accounts.