UK Gilts in ISAs

kidmugsy

Unlike bonds, bond funds don't have a maturity date, nor a guaranteed maturity amount, nor guaranteed dividend ("coupon") payments on guaranteed dates. And they do have charges: a charge of, say, 1.25% p.a. takes a large chunk of the income you seek.

If, like me, you think bonds poor value, your choices are limited. I favour cash held in Cash ISAs (e.g. tracker ISAs such as those offered from time to time by Cambridge BS), and ns&i Index-Linked Savings Certificates when available: I'm hoping that some may go on sale in May.

If you think fiat currency is risky, you could lay off some risk by investing in gold or silver. Some people hereabouts seem to hate the idea, but physical gold and physical silver ETFs have done well for us, and you can hold them in S&S ISAs. I don't know how well they might survive another great financial fiasco. Holding gold sovereigns seems appealing to me for anyone with access to safe-keeping e.g. a bank safety deposit. Unfortunately the banks near me seem all to be abandoning the service so we've never bought coins. You could also hold bullion overseas: there are well-known services storing gold and silver in Zurich and in Perth (WA). I have no experience with them though. I'd think that most people would class gold and silver in your "80" rather than your "20". I'm not sure that they fit into either.

jamesd

Commercial property funds are out of favour at the moment so could be a good alternative. A recovery that is bad for gilts is likely to be good for commercial property.

Strategic bond funds rather than gilt funds, perhaps, but they are more volatile.