Premium Bonds vs Trading Account

Flatulentoldgoat

I gave up on savings accounts and instead maxed out on Premium Bonds. Meanwhile, I've already maxed out my ISA and personal allowances and my only real tax free option is to pump a load into my pension which I don't really feel like doing so this year it's gone up by 5k thanks to the Covid bounce. 

Therefore, would it be prudent to take out a general trading account? My only concern is that the CGT and personal tax hit kills off the reward basis when taking into account the added risk of it naturally losing value due to a slump. Plus, I'd like to have some 'cash' when I need it and for use on a mortgage (whenever that happens)

I'd say my expectations are low and I just want to keep my capital above the inflation threshold.

Thoughts?

TheAble

It's not long until the new tax year, maybe wait until then and open a stocks and shares isa.

Albermarle

and my only real tax free option is to pump a load into my pension which I don't really feel like doing so this year it's gone up by 5k thanks to the Covid bounce. 

I do not really follow the logic of this . What has happened in the markets or world in the last 12 months should have no bearing on deciding between pension, ISA etc 

Normally it is advisable to maximise tax sheltered investments before turning to general trading accounts .

Eco_Miser

While everything may change at the Budget, at the moment you can crystallise up to £12300 of Capital Gains, and receive up to £2000 of dividends, each year in taxable accounts without paying any tax. If the tax is the only thing stopping you investing in a GIA, it shouldn't.

maxsteam

Premium Bonds and trading accounts are very different things. Indeed, there are many different trading accounts and many different things that you can do with a trading account. If you have not had a trading account before, my advice would be not to get too worried about the tax or to imagine there is a right or a wrong answer to which is better but to simply put £100 into a low-cost trading account, buy shares in a couple of your favourite FTSE companies now, then look at the account again in a few months and learn from the experience.
I am not aware of any investment that will guarantee to "keep my capital above the inflation threshold" but, with inflation so low, I expect that there might be such a product out there. Certainly neither Premium Bonds nor a trading account will guarantee this.