The Treasury Select Committee of MPs has said that the Bank of England's Quantitative Easing (or QE) policy, coupled with low interest rates, were massively damaging to pensioners and savers, and that they ought to be compensated.
So why is QE so painful, and will there be any funds forthcoming?
The Bank responded to the financial crisis using two approaches: slashing interests to record lows, and creating £325 billion in three years and using it to buy government bonds - in order to boost the economy.
Three sufferersThere are three groups who have suffered as a result of these policies. Savers have been through three years of record low interest rates and almost non-existent returns from their savings. Anyone planning to use interest to supplement income would have taken a massive and long-lasting hit to their lifestyle.
Anna Bowes, Director of Savings Champion.co.uk says: "It's totally unacceptable that the distress of savers, especially pensioners, is ignored. Mervyn King is aware of the plight of savers, but has been willing to sacrifice them on the altar of economic policy."
Annuities are secured largely by buying long term government bonds, so by forcing the interest rates on these down, the Bank has ensured the returns on bonds are poorer, and therefore the monthly pensions annuities pay out are lower.
The fact that this comes at a time when record number are retiring is galling. This year 806,000 people will reach the age of 65 and face the full horror of their pension position.
They can't even draw down a pension for a while as a solution, because those with draw-down pensions are the third group of sufferers. They are restricted as to how much they can take out of their pension each year. This figure is based on annuity rates, so when annuity rates fall, their income drops too.
Compensation?The committee said: "We recommend that the government consider whether there are any measures that should be taken to mitigate the redistributional effects of quantitative easing, and if appropriate consult on them at the time of the autumn statement." In other words, it wants to see the government consider compensation.
Is this particularly likely? It seems highly doubtful that Osborne has the cash to splash around on compensation, and even a consultation could prove too explosive at a time when the country is likely to be in recession again.
It's easy for a committee of MPs to call for this and garner some positive news coverage. However, a consultation would be difficult, expensive and unpopular for the government. Why would they do it?
Meanwhile, it emerges that the Bank is losing enthusiasm for QE, as it gets more concerned about inflation. The latest minutes from the committee said: "There was a greater chance than before that above target inflation would persist into the medium term." It is now saying that inflation will not fall as fast as it had expected. In this environment it is highly unlikely to start creating more money to add to the inflationary pressures.
So while QE may have been painful, it may well be on hold for a good while to come.