Newcastle Building Society PIBS?

Hello all,

I'm trying to sort out my elderly mother's financial affairs - sadly she has dementia. She has '6000 shares in NBS PIBS -  I don't really understand what these are or what they are worth!

This is the first time I've posted so I can't paste a link, but Hargreaves lists these as being sold @ £167 per share with a 'denomination size' of £1000, and an initial investment of £1000.

  I think the share price pertains to units of 100 or 1000 and not per single share obviously (I think we would know if she was a millionaire!  :smile:) - but which is it?!

I know she's had this for a long time but if it's in units of a thousand, it would mean her whole investment is only worth £1,002 - which doesn't seem to quite add up!

Any ideas? Thanks so much. 






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Comments

  • I am also not sure what the price on HL referees too either, but I know they can’t be redeemed through the issuer. They do however pay a decent level of interest. More info on the various issues on the following links.

    https://www.newcastle.co.uk/investor-relations/terms-of-access/permanent-interest-bearing-shares
  • Hoenir
    Hoenir Posts: 1,286
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    £167 per £100 of nominal stock sounds high. Now that interest rates have risen. Which issue is the PIB? 

    The shares may well be worth holding onto just for the income they generate. If interest rates fall in the future. Then the price will increase again. 
  • Thanks so much everyone! This is amazingly helpful. I think they are indeed the LSE:NBSR 12 5/8% ones. I will have to go through her bank statements to see if any interest payments roughly align. Her finances are so disorganised - it's hard. 

    The other thing that confuses me a bit is that she would have set this up in the late 80s or more likely 90s (she was out of the UK in the 70s). I am reading that these were risky but have historically been  very good investments - and I really can't imagine she would have put any less than 5K into one of these.

    So if the whole thing is worth roughly 10k now, that seems like quite a bad investment for 30 years! Am I missing something?





  • wmb194
    wmb194 Posts: 3,131
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    Thanks so much everyone! This is amazingly helpful. I think they are indeed the LSE:NBSR 12 5/8% ones. I will have to go through her bank statements to see if any interest payments roughly align. Her finances are so disorganised - it's hard. 

    The other thing that confuses me a bit is that she would have set this up in the late 80s or more likely 90s (she was out of the UK in the 70s). I am reading that these were risky but have historically been  very good investments - and I really can't imagine she would have put any less than 5K into one of these.

    So if the whole thing is worth roughly 10k now, that seems like quite a bad investment for 30 years! Am I missing something?

    They were issued in September 1992. Your mother will have received those interest payments every year so, depending on the price paid, it should have been okay as fixed income investments go.


  • JANETSAVING
    JANETSAVING Posts: 18
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    edited 30 December 2023 at 4:49PM
    “ So if the whole thing is worth roughly 10k now, that seems like quite a bad investment for 30 years! Am I missing something?”

    Don’t forget they have been paying her interest of nearly £760 per year…..every year !

    They are paying a historical yield of 12.625% . But more useful for comparative purposes, based on the current share price of ~170p, they are yielding 7.4%. 
    Now it depends on your perception of the risk (I couldn’t possibly advise), but where else can you currently earn that percentage interest on your savings ?
  • Thanks so much. So - I guess the clue is in the name?! - these were very much designed to pay out interest rather than grow as an investment? It just seems a bit mad that - if we have this right - they've paid out in excess of 22k in interest over those years, but the pibs themselves are only worth 10k?
  • Hoenir
    Hoenir Posts: 1,286
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    Thanks so much. So - I guess the clue is in the name?! - these were very much designed to pay out interest rather than grow as an investment? It just seems a bit mad that - if we have this right - they've paid out in excess of 22k in interest over those years, but the pibs themselves are only worth 10k?
    An indication of how high interest rates were in the past.  Around that time my fixed rate mortgage was around 10%. While they provide a good income. Remember that the original investment value of £6k is being eroded over time by inflation. 
  • Think of it as a fixed interest savings account, that, when interest rates are low, will offer some capital gain (growth).
  • wmb194
    wmb194 Posts: 3,131
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    Thanks so much. So - I guess the clue is in the name?! - these were very much designed to pay out interest rather than grow as an investment? It just seems a bit mad that - if we have this right - they've paid out in excess of 22k in interest over those years, but the pibs themselves are only worth 10k?
    You don't have to spend the interest, it can be invested as well.
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