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Pibs

What are the pros and cons of PIBS, how does the interest on them work and are they easy to sell?

Comments

  • baby_boomer
    baby_boomer Posts: 3,883 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    If a BS got into trouble - over mortgage arrears, for instance - it could decide not to pay any interest/dividends in that year.

    Or the next.

    Etc.

    At which point your capital losses on the PIBS would be substantial, their bid-offer spread significant and their marketability difficult.

    You might be saved by being bought out by a bank.

    But then if that got into difficulty it might be nationalised by the government which might ban dividends on the PIBS (now PSBS) until the bank bought back the government's share.
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