Soldato
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Definitely not and why would you want to?
You'd be better off researching some shares with reliable dividends, and buying after market corrections.
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- Thread starter mcast123
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Definitely not and why would you want to?
You'd be better off researching some shares with reliable dividends, and buying after market corrections.
Because there are loads of low coupon gilts around which are tax free for higher rate taxpayers?
Much more viable than savings accounts in this situation and dividend stocks are not risk free as you seem to know as you are suggesting to buy after a crash.
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I just buy them with my ii investment account.
Soldato
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If you're going to bother making investments, you need to have a chance of beating inflation, otherwise it's pointless. You won't with Gilts.
Re shares, yes, you need to be good at selecting the right shares, and probably best to wait for corrections as valuations are high at the moment. 7 years should be enough time to make a profit.
Missing the point entirely. Gilts are cash alternatives, they are savings. You can invest in shares and also buy gilts. 7 years is also not a long time in the share world, plenty of examples of negative returns over that period so if somebody wants a risk free return gilts are very viable right now.
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Soldato
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Yeah the returns are so lame I would never bother with them. They also aren't entirely risk free given the way the government runs its finances these days. "Very viable" for what? A really lame return after 7 years.
Define lame?
Soldato
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A less than real inflation return each year.
Soldato
You'll beat inflation with gilts, just not by much.
Buying at market corrections makes very little difference over the long term, its more important to buy good companies. the focus should be on total return.
The average investor will not outperform bonds due to the inability to handle volatility, search JP Morgan average investor returns.
Soldato
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You won't beat real inflation, you might beat the fudged and fairly meaningless RPI or CPI.
The return from gilts would be so paltry, I'd rather use my £7k for something else. Personally I could pick shares, but if you can't then I'd go for something other than gilts, e.g. invest in my own business venture, or try and flip a car or something.
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Hi all, I changed employer this year and they use Aviva to manage the employee pension scheme, which is the same as my last employer.
Looking through the available funds, my new employer's scheme seems to have access to tracker funds with much lower fees, with most of them having zero fees. For example for US equities, my new employer's scheme offers Aviva Pensions BlackRock US Equity Index Tracker S6 which has no fees, whereas my old employer's offers Av MyM BlackRock US Equity Index Tracker which has 0.14% annual charge.
Before I transfer my old pension across, is there anything I am missing? I guess I am quite surprised that so many funds on the new scheme have no fees at all!
Cheers
Looking through the available funds, my new employer's scheme seems to have access to tracker funds with much lower fees, with most of them having zero fees. For example for US equities, my new employer's scheme offers Aviva Pensions BlackRock US Equity Index Tracker S6 which has no fees, whereas my old employer's offers Av MyM BlackRock US Equity Index Tracker which has 0.14% annual charge.
Before I transfer my old pension across, is there anything I am missing? I guess I am quite surprised that so many funds on the new scheme have no fees at all!
Cheers
Soldato
Beacuse it's a guaranteed fix rate interest for a fix time period before the goverment buys the bond back. It's like how I'm overpaying on my mortage at the moment as the interest rate is 4.01% so it's a guarantee return of 4.01% rather than risking that part of my money into shares that may or may not beat the returns of 4.01%
With people predicting that the bank of england interest rate likely to flattern out or get reduced, buying bonds now at fix rate would become more valuable on the second market than future bonds at a lower rate of return IF I needed to liquidate, something that is much harder to do if I use the bond fund to pay of more of my mortage (plus I may occur charges due to the 10% rule).
I already invest in trackers and have companies that I invest in on a monthly bases, Dollar/pound cost averaging, IMHO and from all the research that I've seen from other companies a far better way to invest than trying to buy the dip/catch a falling knife, divdends are not guaranteed and can go up and down according to how well the company does. And again it's a case of risk vs reward/ and my personal risk threshold.
Own business venture/flipping a car, that's called side hustle aka "work", if I wanted to actually work rather than let my money work for me. I would just work overtime at work or pick up some contracts or fivver myself out rather than have to invest cash into it.
Soldato
It be worth speaking to a penison advisor, the only time I moved an old pension to a new one... it was a like for like council penisons.
Older penisons can have benefits that has been deemed too costly that newer penisons have removed, like the age you can start claiming from.. what happens in death/death in service etc.
It's really not paltry. I'd suggest you haven't haven't looked into them at all.
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Soldato
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Yes you're right I've hardly bothered because it's not worth the time for me. I know what they are and I know the returns on offer, and that investing in them will likely leave you poorer in real terms after 7 years. Also, I think interest rates will not be coming down and will continue to rise.
So, you tell me how much is the return going to be investing £7k for 7 years?
Soldato
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As I said, I would be able to pick shares that provided a better return. It basically comes down to whether you are prepared to put the effort in and have the ability to become a good equity investor, which itself is a lot of work.
My point is the return from gilts is so low, that for me, I'd rather put in the effort to find something that had the potential of a better return. Each to their own though.
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So you're crapping all over them without even knowing the yields, the return and seemingly the benefits in regards to tax vs shares and dividends. I'd suggest more research needed on your part before you instantly dismiss things you don't really understand.
Soldato
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No, I know enough about them to know that the return is relatively low compared to other possibilities and they aren't something I'm going to invest in personally. Still, if you'd like to answer my question on what the return on £7k would be after 7 years, then I think it would show that the return is relatively low, and I would be correct in my assessment.
Soldato
But you forget bro... STONKS only go one way... to the moooooon...
Why should I do the sums for you? The yields are quite easy to find. They are in 4.3 to 5% range right now. Don't forget most of the gain will come at redemption on low coupon gilts and will be tax free.
Most of mine are shorter dated, maturing in 2024 and 25, you'd need a savings account of about 8% to match them for higher rate taxpayers so yes, they have a place.
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