I was watching the Extra Credits series on the South Sea Bubble. In there they say that the UK is still paying off the debt from the incident. However, given how old the debt is, I have to ask: who exactly is getting paid in scenarios like this? Who does the government owe money to?
According to the Guardian, the debt is in the form of a bond. The government is redeeming some of the bonds, which is just to say that each bond holder will receive the value of their bond from the government.
The money will go to each bond holder. Bonds are a literal physical document which can be redeemed for money. Bonds can be transferred to new owners (bought, sold, or given). This is often done for boring financial reasons (such as an investor valuing bonds more highly than another instrument because of their low risk).
So long story short - the money goes to whoever the current owner of each bond is.