Bonds in SIPP or GIA

[stevie1912]

Having recently retired in my early 50s, I am grappling with how to set up my ISA, SIPP and General Investment Accounts according to a 70:30 allocation between equities and bonds.

Some added context is that I find myself with a significant proportion of assets outside of tax wrappers in GIAs. My SIPP assets (no DB) are slightly in excess of the previous £1.073m LTA that may be potentially reinstated. The smallest chunk of my assets are in ISAs.

ISAs would be 100% equities to maximise long term growth as there is no ISA lifetime limit, but where do I place my bond allocation - GIA or SIPP?

I am considering the creation of a bond ladder (covering my spending) for the next 10 years that would exhaust the original allocation of 30% bonds, allowing my equities 10 years of uninterrupted growth for the future. My intention would be to have a mix of low coupon gilts and index linked gilts.

Building a bond ladder in the GIA would be tax efficient, with low income and no capital gains. However, a potential downside I can see of building the ladder in the GIA is that the SIPP would then be 100% equities with no withdrawls which may ultimately result in a higher LTA tax charge as I am already ahead of the previous LTA limit.

The more conventional approach to bonds which I am also considering, would be to maintain a constant 70:30 asset allocation throughout decumulation by regular rebalancing. Would it be appropriate to have the bond allocation using low coupon gilts in the GIA, or would it be better to have a mix of equities and bonds in both GIA and SIPP?

Any thoughts on merits of bond ladder approach and where to hold bonds would be much appreciated.

[tjh290633]

Why on earth are you contemplating disposing of 30% of your capital? You can get a good and increasing return from a good selection of equities. Giving yourself a handicap of a proportion of bonds in your portfolio seems to be a bad idea. You can get protection from inflation with index linked gilts, but the income is minimal. You may also run the risk of capital loss, depending on interest rates.

Look carefully at ITs and what they have to offer, if you don't fancy holding equities direct.

TJH