Should I defer taking my state pension until after financial year 2024 ends?

nottsphil

zagfles said:

HUMBUG said:

6022tivo said:

I do hope a future government clamps down on Tax avoidance. 

I haven't been avoiding tax if that is what you are insinuating.

, low coupon gilts where you make minimal interest but get a capital gain, and no tax on capital gain from gilts. (that's raw gilts, not gilt funds). 

 Are these direct from the Bank of England or from the second-hand market? If the latter, how much would any buying or selling fees eat into an investment of say £25,000?
How reliable are the gains? 

xylophone

https://www.dmo.gov.uk/responsibilities/gilt-market/buying-selling/

https://www.hl.co.uk/shares/corporate-bonds-gilts/what-you-need-to-know-about-buying-government-bonds-gilts

xylophone

So is this £10,000 only for non ISA savings/investment income?

It is for taxable income.

Income from ISAs/premium bonds/NS&I Index Linked Savings Certs is not taxable.

https://community.hmrc.gov.uk/customerforums/pt/683a7777-5a47-ee11-a81c-6045bd0c0056

https://www.moneyhelper.org.uk/en/savings/types-of-savings/tax-on-savings-and-investments

zagfles

nottsphil said:

zagfles said:

HUMBUG said:

6022tivo said:

I do hope a future government clamps down on Tax avoidance. 

I haven't been avoiding tax if that is what you are insinuating.

, low coupon gilts where you make minimal interest but get a capital gain, and no tax on capital gain from gilts. (that's raw gilts, not gilt funds). 

How reliable is the gain on these? How much would any buying or selling fees eat into an investment of say £25,000?

The gain will be 100% reliable if held to maturity (as long at the govt doesn't default on its debt!). If you hold to maturity you just buy, you don't sell, it just matures. 

So for instance if you buy the T26 gilt Treasury 0.125% 30/01/2026 Share Price (T26) Gilt | T26 (hl.co.uk)
which matures 30/1/26, the buy price is 93.95, but IME on HL the actual trade always get a better price than the current buy price. HL charge £12 to buy, other brokers are cheaper, but on £25,000 this is trivial. On HL there's no charge for holding gilts unwrapped. 

So you'd get (25000-12)/0.9395 gilts, ie 26597 gilts, when they mature in Jan 26 you'd get £26597 paid back. No tax on the capital gain. You'd also get a trivial amount of taxable interest, about £50 over the 1.5 years, so £40 after tax if you pay basic rate tax. You need to pay accrued interest when you buy but you get this back on the first coupon date, it'll only be a few £ anyway in this case. 

Overall, works out to about 4.1% AER after tax and charges. So that's equivalent to a savings account paying over 5% interest if you have to pay basic rate tax on your interest. 

nottsphil

zagfles said:

nottsphil said:

zagfles said:

HUMBUG said:

6022tivo said:

I do hope a future government clamps down on Tax avoidance. 

I haven't been avoiding tax if that is what you are insinuating.

, low coupon gilts where you make minimal interest but get a capital gain, and no tax on capital gain from gilts. (that's raw gilts, not gilt funds). 

How reliable is the gain on these? How much would any buying or selling fees eat into an investment of say £25,000?

The gain will be 100% reliable if held to maturity (as long at the govt doesn't default on its debt!). If you hold to maturity you just buy, you don't sell, it just matures. 

So for instance if you buy the T26 gilt Treasury 0.125% 30/01/2026 Share Price (T26) Gilt | T26 (hl.co.uk)
which matures 30/1/26, the buy price is 93.95, but IME on 

Overall, works out to about 4.1% AER after tax and charges. So that's equivalent to a savings account paying over 5% interest if you have to pay basic rate tax on your interest. 

Thanks for composing that whole post, it taught me so much that I don't need to explore Xylophone's links (I'm presuming IME refers to 'in my estimation' and not the bank 😀). This is because I can get 5.06% apr with Vanquis over two years (5.21 over a year) also guaranteed, for less hassle (I'm a lower-end basic rate taxpayer).  
Are there any shares/funds I could buy to sell before 6.4.25 and utilise my capital gains allowance (wasted every year this century)? Happy to take low/no dividends if c.5% capital growth is almost certain.
The idea is that I'd have less capital earning interest taxable at 20% . I still have £15,000 of this year's ISA to utilise. 

zagfles

nottsphil said:

zagfles said:

nottsphil said:

zagfles said:

HUMBUG said:

6022tivo said:

I do hope a future government clamps down on Tax avoidance. 

I haven't been avoiding tax if that is what you are insinuating.

, low coupon gilts where you make minimal interest but get a capital gain, and no tax on capital gain from gilts. (that's raw gilts, not gilt funds). 

How reliable is the gain on these? How much would any buying or selling fees eat into an investment of say £25,000?

The gain will be 100% reliable if held to maturity (as long at the govt doesn't default on its debt!). If you hold to maturity you just buy, you don't sell, it just matures. 

So for instance if you buy the T26 gilt Treasury 0.125% 30/01/2026 Share Price (T26) Gilt | T26 (hl.co.uk)
which matures 30/1/26, the buy price is 93.95, but IME on 

Overall, works out to about 4.1% AER after tax and charges. So that's equivalent to a savings account paying over 5% interest if you have to pay basic rate tax on your interest. 

Thanks for composing that whole post, it taught me so much that I don't need to explore Xylophone's links (I'm presuming IME refers to 'in my estimation' and not the bank 😀). This is because I can get 5.06% apr with Vanquis over two years (5.21 over a year) also guaranteed, for less hassle (I'm a lower-end basic rate taxpayer).  
Are there any shares/funds I could buy to sell before 6.4.25 and utilise my capital gains allowance (wasted every year this century)? Happy to take low/no dividends if c.5% capital growth is almost certain.
The idea is that I'd have less capital earning interest taxable at 20% . I still have £15,000 of this year's ISA to utilise. 

You're not going to get shares that guarantee 5% growth, they'll be subject to whims of the stockmarket and can rise or fall. Short dated low coupon gilts or bonds might do the trick but with bonds you take the risk of the company going bust. 

IME is "in my experience". I think the buy price is the worst price you'd get if you tried to buy at that time - when trading online you get a box up with a price and cost and you have something like 15 seconds to accept or reject it, and the price I've been quoted has always been better than the buy price so I've always accepted. 

nottsphil

zagfles said:

nottsphil said:

zagfles said:

nottsphil said:

zagfles said:

HUMBUG said:

6022tivo said:

I do hope a future government clamps down on Tax avoidance. 

I haven't been avoiding tax if that is what you are insinuating.

, low coupon gilts where you make minimal interest but get a capital gain, and no tax on capital gain from gilts. (that's raw gilts, not gilt funds). 

How reliable is the gain on these? How much would any buying or selling fees eat into an investment of say £25,000?

The gain will be 100% reliable if held to maturity (as long at the govt doesn't default on its debt!). If you hold to maturity you just buy, you don't sell, it just matures. 

So for instance if you buy the T26 gilt Treasury 0.125% 30/01/2026 Share Price (T26) Gilt | T26 (hl.co.uk)
which matures 30/1/26, the buy price is 93.95, but IME on 

Overall, works out to about 4.1% AER after tax and charges. So that's equivalent to a savings account paying over 5% interest if you have to pay basic rate tax on your interest. 

Thanks for composing that whole post, it taught me so much that I don't need to explore Xylophone's links (I'm presuming IME refers to 'in my estimation' and not the bank 😀). This is because I can get 5.06% apr with Vanquis over two years (5.21 over a year) also guaranteed, for less hassle (I'm a lower-end basic rate taxpayer).  
Are there any shares/funds I could buy to sell before 6.4.25 and utilise my capital gains allowance (wasted every year this century)? Happy to take low/no dividends if c.5% capital growth is almost certain.
The idea is that I'd have less capital earning interest taxable at 20% . I still have £15,000 of this year's ISA to utilise. 

You're not going to get shares that guarantee 5% growth, they'll be subject to whims of the stockmarket and can rise or fall. Short dated low coupon gilts or bonds might do the trick but with bonds you take the risk of the company going bust. 

IME is "in my experience". I think the buy price is the worst price you'd get if you tried to buy at that time - when trading online you get a box up with a price and cost and you have something like 15 seconds to accept or reject it, and the price I've been quoted has always been better than the buy price so I've always accepted. 

zagfles said:

nottsphil said:

zagfles said:

nottsphil said:

zagfles said:

HUMBUG said:

6022tivo said:

I do hope a future government clamps down on Tax avoidance. 

I haven't been avoiding tax if that is what you are insinuating.

, low coupon gilts where you make minimal interest but get a capital gain, and no tax on capital gain from gilts. (that's raw gilts, not gilt funds). 

How reliable is the gain on these? How much would any buying or selling fees eat into an investment of say £25,000?

The gain will be 100% reliable if held to maturity (as long at the govt doesn't default on its debt!). If you hold to maturity you just buy, you don't sell, it just matures. 

So for instance if you buy the T26 gilt Treasury 0.125% 30/01/2026 Share Price (T26) Gilt | T26 (hl.co.uk)
which matures 30/1/26, the buy price is 93.95, but IME on 

Overall, works out to about 4.1% AER after tax and charges. So that's equivalent to a savings account paying over 5% interest if you have to pay basic rate tax on your interest. 

Thanks for composing that whole post, it taught me so much that I don't need to explore Xylophone's links (I'm presuming IME refers to 'in my estimation' and not the bank 😀). This is because I can get 5.06% apr with Vanquis over two years (5.21 over a year) also guaranteed, for less hassle (I'm a lower-end basic rate taxpayer).  
Are there any shares/funds I could buy to sell before 6.4.25 and utilise my capital gains allowance (wasted every year this century)? Happy to take low/no dividends if c.5% capital growth is almost certain.
The idea is that I'd have less capital earning interest taxable at 20% . I still have £15,000 of this year's ISA to utilise. 

You're not going to get shares that guarantee 5% growth, they'll be subject to whims of the stockmarket and can rise or fall. Short dated low coupon gilts or bonds might do the trick but with bonds you take the risk of the company going bust. 

IME is "in my experience". I think the buy price is the worst price you'd get if you tried to buy at that time - when trading online you get a box up with a price and cost and you have something like 15 seconds to accept or reject it, and the price I've been quoted has always been better than the buy price so I've always accepted. 

What 'time' are you referring to when buying? ( I have no experience of financial trading apart from buying shares at denationalisations).

I like the concept of these coupon gilts because they're Government guaranteed and you know when buying exactly what your capital gain and interest will be. I think I've delayed eventual dementia by a few days by working out the price I'd need to pay to get the same (annual equivalent) interest rate as the Vanquis one year fixed, but without the tax.
 Say tomorrow I bought 80,000 one pound ¼% Treasury Gilts that mature on Friday 4th April 2025 for (an ambitious) 96.25p each. (I'm presuming the interest rate was fixed during the ultra_low period). I'd get both coupons, yielding £200 which would be subject to 20% tax as no different from interest. Added to the capital gain of £3000 (3.75p x 80,000) would mean the original £77,000 investment has yielded £3160 over just 287 days. Scaling this up to a year for comparison with the Vanquis fixed term, 365 /287 x £3160 = £4018.81 which is 5.219% of £77,000, tax paid. Any constructive comments or criticisms will be welcomed!

EthicsGradient

nottsphil said:

zagfles said:

nottsphil said:

zagfles said:

nottsphil said:

zagfles said:

HUMBUG said:

6022tivo said:

I do hope a future government clamps down on Tax avoidance. 

I haven't been avoiding tax if that is what you are insinuating.

, low coupon gilts where you make minimal interest but get a capital gain, and no tax on capital gain from gilts. (that's raw gilts, not gilt funds). 

How reliable is the gain on these? How much would any buying or selling fees eat into an investment of say £25,000?

The gain will be 100% reliable if held to maturity (as long at the govt doesn't default on its debt!). If you hold to maturity you just buy, you don't sell, it just matures. 

So for instance if you buy the T26 gilt Treasury 0.125% 30/01/2026 Share Price (T26) Gilt | T26 (hl.co.uk)
which matures 30/1/26, the buy price is 93.95, but IME on 

Overall, works out to about 4.1% AER after tax and charges. So that's equivalent to a savings account paying over 5% interest if you have to pay basic rate tax on your interest. 

Thanks for composing that whole post, it taught me so much that I don't need to explore Xylophone's links (I'm presuming IME refers to 'in my estimation' and not the bank 😀). This is because I can get 5.06% apr with Vanquis over two years (5.21 over a year) also guaranteed, for less hassle (I'm a lower-end basic rate taxpayer).  
Are there any shares/funds I could buy to sell before 6.4.25 and utilise my capital gains allowance (wasted every year this century)? Happy to take low/no dividends if c.5% capital growth is almost certain.
The idea is that I'd have less capital earning interest taxable at 20% . I still have £15,000 of this year's ISA to utilise. 

You're not going to get shares that guarantee 5% growth, they'll be subject to whims of the stockmarket and can rise or fall. Short dated low coupon gilts or bonds might do the trick but with bonds you take the risk of the company going bust. 

IME is "in my experience". I think the buy price is the worst price you'd get if you tried to buy at that time - when trading online you get a box up with a price and cost and you have something like 15 seconds to accept or reject it, and the price I've been quoted has always been better than the buy price so I've always accepted. 

zagfles said:

nottsphil said:

zagfles said:

nottsphil said:

zagfles said:

HUMBUG said:

6022tivo said:

I do hope a future government clamps down on Tax avoidance. 

I haven't been avoiding tax if that is what you are insinuating.

, low coupon gilts where you make minimal interest but get a capital gain, and no tax on capital gain from gilts. (that's raw gilts, not gilt funds). 

How reliable is the gain on these? How much would any buying or selling fees eat into an investment of say £25,000?

The gain will be 100% reliable if held to maturity (as long at the govt doesn't default on its debt!). If you hold to maturity you just buy, you don't sell, it just matures. 

So for instance if you buy the T26 gilt Treasury 0.125% 30/01/2026 Share Price (T26) Gilt | T26 (hl.co.uk)
which matures 30/1/26, the buy price is 93.95, but IME on 

Overall, works out to about 4.1% AER after tax and charges. So that's equivalent to a savings account paying over 5% interest if you have to pay basic rate tax on your interest. 

Thanks for composing that whole post, it taught me so much that I don't need to explore Xylophone's links (I'm presuming IME refers to 'in my estimation' and not the bank 😀). This is because I can get 5.06% apr with Vanquis over two years (5.21 over a year) also guaranteed, for less hassle (I'm a lower-end basic rate taxpayer).  
Are there any shares/funds I could buy to sell before 6.4.25 and utilise my capital gains allowance (wasted every year this century)? Happy to take low/no dividends if c.5% capital growth is almost certain.
The idea is that I'd have less capital earning interest taxable at 20% . I still have £15,000 of this year's ISA to utilise. 

You're not going to get shares that guarantee 5% growth, they'll be subject to whims of the stockmarket and can rise or fall. Short dated low coupon gilts or bonds might do the trick but with bonds you take the risk of the company going bust. 

IME is "in my experience". I think the buy price is the worst price you'd get if you tried to buy at that time - when trading online you get a box up with a price and cost and you have something like 15 seconds to accept or reject it, and the price I've been quoted has always been better than the buy price so I've always accepted. 

What 'time' are you referring to when buying? ( I have no experience of financial trading apart from buying shares at denationalisations).

I like the concept of these coupon gilts because they're Government guaranteed and you know when buying exactly what your capital gain and interest will be. I think I've delayed eventual dementia by a few days by working out the price I'd need to pay to get the same (annual equivalent) interest rate as the Vanquis one year fixed, but without the tax.
 Say tomorrow I bought 80,000 one pound ¼% Treasury Gilts that mature on Friday 4th April 2025 for (an ambitious) 96.25p each. (I'm presuming the interest rate was fixed during the ultra_low period). I'd get both coupons, yielding £200 which would be subject to 20% tax as no different from interest. Added to the capital gain of £3000 (3.75p x 80,000) would mean the original £77,000 investment has yielded £3160 over just 287 days. Scaling this up to a year for comparison with the Vanquis fixed term, 365 /287 x £3160 = £4018.81 which is 5.219% of £77,000, tax paid. Any constructive comments or criticisms will be welcomed!

Using an online broker like ii, HL or AJ Bell, they give a rough price you can buy at, based on the recent market, and when you've typed in how many you want to buy, you click on a button to get a current quote for that amount. They'll give an exact price you can buy that amount at, and you have 15 seconds to accept it, or reject it. So, for instance, the TN25 (¼% 31/1/25) gilt was shown at the rough price of £0.9773, and when I started the process to buy 1000, the exact price I was offered was £0.97646.

With gilts there is the added complication of 'clean' and 'dirty' prices, which evens out the variation in price you might expect over the 6 months between when the coupons are due. With low coupons, the difference is small, but for a true figure it ought to be taken into account, and a proper explanation needs to come from someone who can explain better than me.

For your calculation, the concept looks basically OK (not that I can see a ¼% gilt maturing in April). There is a spreadsheet function XIRR which works out an equivalent rate for you - this takes account of you getting one coupon 6 months before maturity. For your scenario, it shows
21/06/24 -77000

04/10/24 80

04/04/25 80

04/04/25 80000

5.252%
For the actual TN25 gilt, and that price above (with, say, a £4 trading fee in the purchase, I think it'd be, without the clean/dirty adjustment,
21/06/24 -78120.80

31/07/24 80

31/01/25 80

31/01/25 80000

4.292%

nottsphil

EthicsGradient said:

nottsphil said:

zagfles said:

nottsphil said:

zagfles said:

nottsphil said:

zagfles said:

HUMBUG said:

6022tivo said:

I do hope a future government clamps down on Tax avoidance. 

I haven't been avoiding tax if that is what you are insinuating.

, low coupon gilts where you make minimal interest but get a capital gain, and no tax on capital gain from gilts. (that's raw gilts, not gilt funds). 

How reliable is the gain on these? How much would any buying or selling fees eat into an investment of say £25,000?

The gain will be 100% reliable if held to maturity (as long at the govt doesn't default on its debt!). If you hold to maturity you just buy, you don't sell, it just matures. 

So for instance if you buy the T26 gilt Treasury 0.125% 30/01/2026 Share Price (T26) Gilt | T26 (hl.co.uk)
which matures 30/1/26, the buy price is 93.95, but IME on 

Overall, works out to about 4.1% AER after tax and charges. So that's equivalent to a savings account paying over 5% interest if you have to pay basic rate tax on your interest. 

Thanks for composing that whole post, it taught me so much that I don't need to explore Xylophone's links (I'm presuming IME refers to 'in my estimation' and not the bank 😀). This is because I can get 5.06% apr with Vanquis over two years (5.21 over a year) also guaranteed, for less hassle (I'm a lower-end basic rate taxpayer).  
Are there any shares/funds I could buy to sell before 6.4.25 and utilise my capital gains allowance (wasted every year this century)? Happy to take low/no dividends if c.5% capital growth is almost certain.
The idea is that I'd have less capital earning interest taxable at 20% . I still have £15,000 of this year's ISA to utilise. 

You're not going to get shares that guarantee 5% growth, they'll be subject to whims of the stockmarket and can rise or fall. Short dated low coupon gilts or bonds might do the trick but with bonds you take the risk of the company going bust. 

IME is "in my experience". I think the buy price is the worst price you'd get if you tried to buy at that time - when trading online you get a box up with a price and cost and you have something like 15 seconds to accept or reject it, and the price I've been quoted has always been better than the buy price so I've always accepted. 

zagfles said:

nottsphil said:

zagfles said:

nottsphil said:

zagfles said:

HUMBUG said:

6022tivo said:

I do hope a future government clamps down on Tax avoidance. 

I haven't been avoiding tax if that is what you are insinuating.

, low coupon gilts where you make minimal interest but get a capital gain, and no tax on capital gain from gilts. (that's raw gilts, not gilt funds). 

How reliable is the gain on these? How much would any buying or selling fees eat into an investment of say £25,000?

The gain will be 100% reliable if held to maturity (as long at the govt doesn't default on its debt!). If you hold to maturity you just buy, you don't sell, it just matures. 

So for instance if you buy the T26 gilt Treasury 0.125% 30/01/2026 Share Price (T26) Gilt | T26 (hl.co.uk)
which matures 30/1/26, the buy price is 93.95, but IME on 

Overall, works out to about 4.1% AER after tax and charges. So that's equivalent to a savings account paying over 5% interest if you have to pay basic rate tax on your interest. 

Thanks for composing that whole post, it taught me so much that I don't need to explore Xylophone's links (I'm presuming IME refers to 'in my estimation' and not the bank 😀). This is because I can get 5.06% apr with Vanquis over two years (5.21 over a year) also guaranteed, for less hassle (I'm a lower-end basic rate taxpayer).  
Are there any shares/funds I could buy to sell before 6.4.25 and utilise my capital gains allowance (wasted every year this century)? Happy to take low/no dividends if c.5% capital growth is almost certain.
The idea is that I'd have less capital earning interest taxable at 20% . I still have £15,000 of this year's ISA to utilise. 

You're not going to get shares that guarantee 5% growth, they'll be subject to whims of the stockmarket and can rise or fall. Short dated low coupon gilts or bonds might do the trick but with bonds you take the risk of the company going bust. 

IME is "in my experience". I think the buy price is the worst price you'd get if you tried to buy at that time - when trading online you get a box up with a price and cost and you have something like 15 seconds to accept or reject it, and the price I've been quoted has always been better than the buy price so I've always accepted. 

What 'time' are you referring to when buying? ( I have no experience of financial trading apart from buying shares at denationalisations).

I like the concept of these coupon gilts because they're Government guaranteed and you know when buying exactly what your capital gain and interest will be. I think I've delayed eventual dementia by a few days by working out the price I'd need to pay to get the same (annual equivalent) interest rate as the Vanquis one year fixed, but without the tax.
 Say tomorrow I bought 80,000 one pound ¼% Treasury Gilts that mature on Friday 4th April 2025 for (an ambitious) 96.25p each. (I'm presuming the interest rate was fixed during the ultra_low period). I'd get both coupons, yielding £200 which would be subject to 20% tax as no different from interest. Added to the capital gain of £3000 (3.75p x 80,000) would mean the original £77,000 investment has yielded £3160 over just 287 days. Scaling this up to a year for comparison with the Vanquis fixed term, 365 /287 x £3160 = £4018.81 which is 5.219% of £77,000, tax paid. Any constructive comments or criticisms will be welcomed!

With gilts there is the added complication of 'clean' and 'dirty' prices, which evens out the variation in price you might expect over the 6 months between when the coupons are due. With low coupons, the difference is small, but for a true figure it ought to be taken into account, and a proper explanation needs to come from someone who can explain better than me.

For your calculation, the concept looks basically OK (not that I can see a ¼% gilt maturing in April). There is a spreadsheet function XIRR which works out an equivalent rate for you - this takes account of you getting one coupon 6 months before maturity. For your scenario, it shows

21/06/24 -77000

04/10/24 80

04/04/25 80

04/04/25 80000

5.252%
For the actual TN25 gilt, and that price above (with, say, a £4 trading fee in the purchase, I think it'd be, without the clean/dirty adjustment,

21/06/24 -78120.80

31/07/24 80

31/01/25 80

31/01/25 80000

4.292%

Looks like I've miscounted my number of days because 285÷287 × your 5.252 = 5.215%.
The percentage for the real(istic) buy price is disappointing as it equates to 5.365% for the basic rate taxpayer, a figure which could conceivably be beaten by a challenger bank or loyalty offer following the BBR decision akin to Nationwide's 5.5% pa for 18 months.

If you refer to nothing more than the equivalent of a share decreasing slightly in value ex-(small) dividend, then no further explanation is required  (apart from the 'dirty' terminology!)

zagfles

For flat gits the "dirty" price just includes accrued interest. Coupons are paid every 6 months, so if say you buy a gilt 3 months before the coupon date, then half the next interest payment belongs to the previous owner. So the dirty price includes 3 month's interest, then you get a full 6 month's interest 3 months later on the coupon date. I think if you buy very close to the coupon date then the previous owner gets the coupon and the dirty price is lower than the clean price to reflect that. 

Even if it's fairly trivial amounts, you need to understand this to accurately report your interest if you do a tax return, if you hold gilts unwrapped. The interest paid on purchase I think can be deducted from the interest earned, although not sure how it works across tax years (eg if you purchase in March and get the coupon in May), I've not done it.  

Index linked gilts are more complicated, there "dirty" can include inflation adjustment.