PIBS anyone ?

Gilts, bonds, and interest-bearing shares
hiriskpaul
2 Lemon pips
Posts: 100
Joined: November 4th, 2016, 1:04 pm

Re: PIBS anyone ?

Postby hiriskpaul » December 12th, 2016, 2:16 pm

An additional risk with PIBS and all other securities issued by banks and building societies, including all equity, deposits and bonds other than senior secured, is that they may be "bailed in" by the regulator (the PRA in the UK) prior to the bank actually being wound up.

Bail in would only happen if the bank was in extreme trouble, but something extra to consider with any bank or building society investment.

taken2often
Posts: 13
Joined: November 9th, 2016, 12:10 pm

Re: PIBS anyone ?

Postby taken2often » December 14th, 2016, 2:08 pm

here is my 2 cents worth.

I have 18 Pibs and 16 Preference shares all bought years ago. Underwater at present with Manchester. I probably average around 7.5%. My first batch 14 years ago I bought at 6.5% yield. So they are back to square one, although some are coming to nearly paid for and the income will continue. I will not buy again until they are up to 8%. This should happen as the interest rate rises. These should not be traded on a regular basis buy for life unless you have a very high profit. I trimmed some down this year due to this.

I have not read all the replies so I will mention one or two points. The income is paid gross which is great in Sipps and ISA but 20% tax on taxable account as it is interest. The new £1000 allowance may help. I have been Bed and ISA each year for years so the 20% tax saving is substantial.

Northern Rock and Bradford and Bingly both suspended pay out, but I got my money back eventually. Made a profit on NR as I bought a batch at 17p.

I have been using the higher yield for years to buy dividend growth shares and Investment Trusts.

Bob


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