How can I best buy gilts?

zagfles

GeoffTF said:

DRS1 said:

I wonder what happens when you press the buy button for an Index Linked Gilt?  Do AJ Bell let you deal online?  For most ILGs at HL you have to call them because the price shown is not the price you have to pay - it excludes the indexation to date.

With AJ Bell, I did not speak to a dealer. I placed an order (I think it was over the phone, but my last trade with them was five years ago) and it was executed shortly after. I did not know the price in advance. I was charged the online commission.

With iWeb, I used to be able to speak to a dealer and know the price before I traded, and pay the standard £5 commission. More recently, I entered the trade online, and it was executed as for AJ Bell.

With HL, I rang up and was put through to a dealer. He made the trade, but I was not told the price in advance. I was charged the online commission as per their website, but contrary to what I was told by the lady who answered the phone initially.

Trading is done at the clean price (which is the price shown on the London Stock Exchange website), and settled at the dirty price, which includes indexation and accrued interest.

When I bought over the phone with HL they did confirm the price (clean price) and I think I got slightly better than the quoted price. You don't need to know how many gilts it actually buys, you can just request an amount (eg £10k worth). The display issue is annoying when it shows an immediate massive loss as it multiplies the clean price by the number of gilts, but if it's in a SIPP, in the drawdown information it shows an accurate total valuation. Not sure why they can't sort this. 

zagfles

d6fs1l said:

All linkers have low coupons so they may not be appropriate for you if you need income.

T30I has a coupon of 4.125%. Clearly there'll be a real terms capital loss but if index linked income is desired with a known real terms capital loss then it might be an option. Otherwise just use any linker and sell for income, or do a ladder with maturities at intervals to provide income.