Bonds - basic advice please

[mc2fool]

The most straight forward method of wealth preservation is savings in bank/building society, which now offer fixed rate returns of 5%. Interest rates are due to fall so this might be good time to lock on a good rate.

Unfortunately most of the 5% bank/building society savings accounts aren't offered for within a SIPP, which is what the OP has their funds to be preserved in, and on the flip side those that are may not be allowed by your SIPP provider.

There's a list of bank/building society savings accounts that are offered within a SIPP here: https://investmentsense.co.uk/accounts-for-pensions/

The best is a 1 year fixed from Metro at 5.46%. Unfortunately I couldn't find any list of which SIPP providers will allow it, or any other savings account.

This list shows how much which broker-type SIPP providers will pay in interest on cash in the SIPP. https://moneytothemasses.com/saving-for-your-future/investing/investment-platforms-paying-the-highest-interest-rate-on-cash

There's several around 3.5% +/- a bit, and BestInvest actually living up to their name (in this respect at least) offering 4.35%. But these are of course variable rate instant access deposits.

[Oggy]

Unfortunately most of the 5% bank/building society savings accounts aren't offered for within a SIPP, which is what the OP has their funds to be preserved in, and on the flip side those that are may not be allowed by your SIPP provider.

There's a list of bank/building society savings accounts that are offered within a SIPP here: https://investmentsense.co.uk/accounts-for-pensions/

The best is a 1 year fixed from Metro at 5.46%. Unfortunately I couldn't find any list of which SIPP providers will allow it, or any other savings account.

This list shows how much which broker-type SIPP providers will pay in interest on cash in the SIPP. https://moneytothemasses.com/saving-for ... te-on-cash

There's several around 3.5% +/- a bit, and BestInvest actually living up to their name (in this respect at least) offering 4.35%. But these are of course variable rate instant access deposits

Correct. The money is held within SIPPs with HL and AJ Bell. I am minded to annually drip around 5% of the pot each year into ETF global bond funds (VAGS or similar) and also consider purchase of a 10 year index linked gilt held to maturity. TG36 looks suitable.....

[Alaric]

The money is held within SIPPs with HL and AJ Bell. I am minded to annually drip around 5% of the pot each year into ETF global bond funds (VAGS or similar) and also consider purchase of a 10 year index linked gilt held to maturity. TG36 looks suitable.....

Sterling money-market funds are available in both ETF and OIEC form. There's no absolute guarantee they won't lose value, so they are reliant on the skill of the managers to avoid defaulters. When interest rates are really low, returns can be eaten by the charges.

[Oggy]

Sterling money-market funds are available in both ETF and OIEC form. There's no absolute guarantee they won't lose value, so they are reliant on the skill of the managers to avoid defaulters. When interest rates are really low, returns can be eaten by the charges.

Noted. There are as many detractors as there are promotors on any investment it seems. My reason for the possible investment in ETF global bond funds is diversification and a possible shelter in case of an equities crash. To be honest, I am not entirely sure which way to turn. I could read up until the cows come home and even then I suspect I'd still be uncertain.

[88V8]

I could read up until the cows come home and even then I suspect I'd still be uncertain.

Yes, it's a pain. Too much choice, often with no definitive 'right answers'. What suits me as an income investor may not suit you.
And most investment decisions depend on timing. One does not want to be buying bond funds at the bottom of the interest rate cycle, for instance.

V8

[bluedonkey]

Thought I would put my question here as it is a basic question.

I have gilt TN24 in my Hargreaves Lansdown account which matures today, 31/1/24. The money has not yet arrived, does anyone have experience of how quickly funds arrive in these circumstances?

[kempiejon]

Generally, with Hargreaves Lansdowne, whatever the security it'll come when everybody else has had there plus a day or two.

I've got TN24 in Halifax and HL so I'll be able to compare those two. In Halifax the cash is already there and the stock line gone. HL the dealing facility has obviously been greyed out but it's still listed as a holding.

[OldBoyReturns]

Thought I would put my question here as it is a basic question.

I have gilt TN24 in my Hargreaves Lansdown account which matures today, 31/1/24. The money has not yet arrived, does anyone have experience of how quickly funds arrive in these circumstances?

HL can be a laggard when it come to crediting cash from interest and redemptions. Anything from 2-5 days delay is not uncommon in my experience. I now find a very sharp message on the due date demanding the cash be credited without further delay (failing which you will make a formal complaint) words wonders ...

[mc2fool]

I've got TN24 in Halifax and HL so I'll be able to compare those two. In Halifax the cash is already there and the stock line gone.

Ditto for Interactive Investor. Not sure if I'll get a contract note or anything more than the line in the transaction history that just says "HM TREA0.12524 Mandatory Redemption"; there's nothing yet.

What documentation, if any, does Halifax provide for the redemption?

[hiriskpaul]

I also hold TN24 at HL. For other maturing bonds there has definitely been a tardiness to credit accounts. You may also see the interest paid separately to capital. Not that there is much in this case! I am aiming to roll over to TN25, maturing next January, as soon as we are paid. Higher coupon at 0.25%, but still a much better after tax return than deposit accounts.

Good point about chasing, I will message them now.

[kempiejon]

What documentation, if any, does Halifax provide for the redemption?

Halifax describes the transaction as a corporate action but no new documentation to follow up that yet. The cash statement shows a trivial error too, there's a few pounds missing, it's just the capital, no sign of interest. Too be honest I'm not surprised it's not concluded yet and I'll give the brokers a few more days to see the process out. Then compare the two; I have IL gilt TR24 in iweb so we'll have a look at that in March too.

[kempiejon]

At HL the capital is in my cash account now and the stock line removed.


edit to add this description

Treasury 0.125% 31/01/2024 Gilt
Net Redemption Payment

edit again coupon in Halifax now too

[mc2fool]

What documentation, if any, does Halifax provide for the redemption?

Halifax describes the transaction as a corporate action but no new documentation to follow up that yet. The cash statement shows a trivial error too, there's a few pounds missing, it's just the capital, no sign of interest. Too be honest I'm not surprised it's not concluded yet and I'll give the brokers a few more days to see the process out. Then compare the two; I have IL gilt TR24 in iweb so we'll have a look at that in March too.

Interactive Investor has the final coupon in the transaction history, and as a separate line item, so it looks like I've got everything (although I haven't yet double checked the numbers). Have you looked under Dividend History in Halifax to see if it's there?

[daveh]

Thought I would put my question here as it is a basic question.

I have gilt TN24 in my Hargreaves Lansdown account which matures today, 31/1/24. The money has not yet arrived, does anyone have experience of how quickly funds arrive in these circumstances?

I hold in HSDL and the money was there 9am this morning, but no sign of the coupon (then but its there now with all the other coupons due today). The appearance of the money was odd as it appeared twice and then one was paid back. Is this normal?

line 1 Corporate Action: xxxx.xx UKGOVT OF 0.125 BDS 31/01/24 GBP1000   £xxxx.xx money into account
Line 2 Settlement Funds Transfer                                                                 £xxxx.xx money into account
Line 3 Debit Payment                                                                                   £xxxx.xx money out of account

Which leaves me with the correct amount of £xxxx.xx which I am now about to move into TN25.

[hiriskpaul]

Amazingly the money was already in HL. All reinvested into TN25 at 95.796!

[bluedonkey]

Amazingly the money was already in HL. All reinvested into TN25 at 95.796!

Yes, HL came through for me also in a timely fashion in the end.

I have also held TN25 since August 2023. The interest for TN24 came through today in HL but not the interest for TN25 which seems strange. Anyway it's almost negligible.

The proceeds from TN24 have been rolled over into TN25 @ 95.815. I was toying with the idea of splitting the funds and including slightly longer (less short really) gilts. For example, T26 and TN28. However, TN25 offered the best alternative rate compared to the fixed deposit equivalent, whereas those slightly longer gilts less so. Plus, I am really only using gilts as a substitute for deposits rather than as a play on fixed interest.

[digitaria]

The TN24 redemption appears in my ii account, but the proceeds are not yet available for investment - the funds are marked "pending".

[daveh]

Amazingly the money was already in HL. All reinvested into TN25 at 95.796!

Yes, HL came through for me also in a timely fashion in the end.

I have also held TN25 since August 2023. The interest for TN24 came through today in HL but not the interest for TN25 which seems strange. Anyway it's almost negligible.

The proceeds from TN24 have been rolled over into TN25 @ 95.815. I was toying with the idea of splitting the funds and including slightly longer (less short really) gilts. For example, T26 and TN28. However, TN25 offered the best alternative rate compared to the fixed deposit equivalent, whereas those slightly longer gilts less so. Plus, I am really only using gilts as a substitute for deposits rather than as a play on fixed interest.

I had a gilt ladder of equal cash amounts of TN24, TN25, T26, TN28 and TG31 bought between August and October last year on YTM (not taking account of any coupon) of 4.3-4.8% pa. I had a look at yieldgimp this morning and TN25 had a YTM significantly better than the longer dated gilts so the proceeds all went into TN25. Puts off the decision off what to do with the cash for another year. There also doesn't look to be any other low coupon gilts longer dated than TG31. There is TG61 with a coupon of 0.5% but priced at 30 that means income of 1.3% pa which starts being a reasonable amount going towards the interest allowance. Plus its too far away from maturity for what I want.

[mc2fool]

The TN24 redemption appears in my ii account, but the proceeds are not yet available for investment - the funds are marked "pending".

That's curious, mine was available straight off (for investment with ii, not for withdrawal of course) and, like pretty much everyone else here, went into TN25. Looks like TN25 might make ii's most traded of the month list just from TLF clients!

[kempiejon]

The TN24 redemption appears in my ii account, but the proceeds are not yet available for investment - the funds are marked "pending".

That's curious, mine was available straight off (for investment with ii, not for withdrawal of course) and, like pretty much everyone else here, went into TN25. Looks like TN25 might make ii's most traded of the month list just from TLF clients!

Just for completeness, I said mine in Halifax was a few quid adrift, that's because in that account dividends are set to pay away and although the money was taken from my cash balance from the redemption the income hadn't swept across. Sorted now. Also I've not joined you all in TN25, I do have some in another account, but that money was in my Halifax general account and I hope there's enough headroom to move some to my SIPP, first I need to double check my numbers. For now the cash is in the current account.