Short Term Gilts

EthicsGradient

The UK Treasury does issue Treasury Bills with terms of 1, 3 or 6 months, but buying them at the weekly tenders requires a minimum of £500,000: https://www.dmo.gov.uk/responsibilities/money-markets/about-treasury-bills/

I doubt you'll find a way of purchasing them off someone else, too - though if you have a top-notch broker, you could ask.

I think most of us regard the TN24 (matures 31/1/24) as "short term". If you do want "really short", then I think you're stuck with savings accounts or money market funds, and income tax.

Aminatidi

Thanks so what about these?

https://www.dmo.gov.uk/responsibilities/money-markets/about-treasury-bills/

"Treasury bills may be issued with a minimum maturity of 1 day and a maximum maturity of 364 days."

We can't buy those as the public can we?

Doctor_Who

Aminatidi said:

Thanks so what about these?

https://www.dmo.gov.uk/responsibilities/money-markets/about-treasury-bills/

"Treasury bills may be issued with a minimum maturity of 1 day and a maximum maturity of 364 days."

We can't buy those as the public can we?

Those are what EthicsGradient mentioned above (the same link on the DMO website). I'm not aware of a secondary market. The DMO website talks about 'Primary Participants' (see link below), you could ask one of them, but I suspect the answer will be 'no'.

https://www.dmo.gov.uk/responsibilities/money-markets/primary-participants/

Aminatidi

That's embarrassing I didn't spot there was a second page!  But thanks and to EthicsGradient too as that nails that one on term.

ispookie666

iWeb has options to purchase gilts and linkers.  

valiant24

I applied a few weeks ago to be on the "Approved List" to be able to buy Gilts directly.   Naturally Computershare are experiencing "unprecedented demand" and it hasn't been processed yet.

Is anyone else on it?  If so, can you tell me what the process actually is to buy, can it be done online or is it done by post (the DMO and Computershare are silent on this aspect)?

I've done this because, I understand it, if I buy instead through AJ Bell or iWEB (with whom I have dealing accounts) I'll avoid a platform charge (maybe not relevant with iWEB?), and get a better buy price.  Can anyone disabuse me?

Thanks
V

Aminatidi

Tbh the Computershare process looks archaic.

Paper forms and cheques and sending notarised proof of identity to buy gilts in 2023 !!!!!!?

From what I can tell you can just do an online trade if your existing platform lets you (and most seem to) and that's that.

Doctor_Who

valiant24 said:

I applied a few weeks ago to be on the "Approved List" to be able to buy Gilts directly.   Naturally Computershare are experiencing "unprecedented demand" and it hasn't been processed yet.

Is anyone else on it?  If so, can you tell me what the process actually is to buy, can it be done online or is it done by post (the DMO and Computershare are silent on this aspect)?

I've done this because, I understand it, if I buy instead through AJ Bell or iWEB (with whom I have dealing accounts) I'll avoid a platform charge (maybe not relevant with iWEB?), and get a better buy price.  Can anyone disabuse me?

Thanks
V

Might be worthwhile reading this thread since Computershare seem to be expensive. Why not just use iWeb? My platform (II) is fixed fee so it's not cost me any extra to hold gilts.

https://forums.moneysavingexpert.com/discussion/comment/80209466/#Comment_80209466

OldScientist

valiant24 said:

I applied a few weeks ago to be on the "Approved List" to be able to buy Gilts directly.   Naturally Computershare are experiencing "unprecedented demand" and it hasn't been processed yet.

Is anyone else on it?  If so, can you tell me what the process actually is to buy, can it be done online or is it done by post (the DMO and Computershare are silent on this aspect)?

I've done this because, I understand it, if I buy instead through AJ Bell or iWEB (with whom I have dealing accounts) I'll avoid a platform charge (maybe not relevant with iWEB?), and get a better buy price.  Can anyone disabuse me?

Thanks
V

I wondered about the approved list route - if you get anywhere, it would be interesting if you were to report back.

iweb charge £5 per transaction (even for gilts over the telephone) which is not too bad provided you are buying in amounts greater than, say £5k for shorter duration bonds (for longer duration bonds, the overhead is less). There is no cost for holding the gilts and assuming they are held to maturity, only one transaction charge.

The prices I obtained over the phone with iweb were better than the bid prices quoted on the LSE (i.e., less spread), which was a pleasant surprise.


edit: according to the terms and conditions at computershare (see https://content-assets.computershare.com/eh96rkuu9740/2EYh63iTrLvbyD9ycnrhEO/6f994a2a6150d4c0ce92779eefb52e8b/Purchase_and_Sale_Service_Terms_and_Conditions.pdf ) costs are 0.7% up to £5k (minimum of £12.50) and "£35 plus 0.375% of the amount in excess of £5,000" - i.e. well over the £5 at iweb. However, you might not get spreads. At least you can purchase by email even if you have to post the certificates off when selling.

valiant24

OldScientist said:

 costs are 0.7% up to £5k (minimum of £12.50) and "£35 plus 0.375% of the amount in excess of £5,000" - i.e. well over the £5 at iweb. However, you might not get spreads. At least you can purchase by email even if you have to post the certificates off when selling.

Yes, this is the piece that remains opaque.  I guess I may soon know.   I have been asked for proof that I already have substantial investments (!!!!!!!), so hopefully I will be able to give it a whirl, and report back, shortly.