Buying index-linked gilts via Halifax Sharedealing - my 'interesting' experience.

Frequentlyhere

leosayer said:

Showing the clean price seems normal.

The thread below shows the impact this had on someone's tax free cash from their II SIPP:

https://forums.moneysavingexpert.com/discussion/6603801/interactive-investor-calculation-of-25-tax-free-cash-when-holding-index-linked-gilts/p1

Whilst it may be common on some platforms, doesn't the conclusion of that thread just support the notion that it's very confusing to all concerned to do so?

Relevant excerpt from the ombudsman from that thread:

"  9 May 2025 – II said “the 25 percent tax free lump sum from your SIPP is calculated using the clean price of your holdings including Index-Linked gilts as reflected in your account. We are unable to use the dirty price as our system uses the clean price provided by the London Stock Exchange.”

However, II have now acknowledged that these responses to you were incorrect. They have stated:

“When requesting his 25% lump sum or selling that the “dirty” price would be used. The customer’s complaint is that we show the “clean” price purely on the portfolio page which is an INDICATION of the value based on the price feeds we receive. When the customer comes to sell or take a tax-free allowance the dirty price can be manually calculated which ensures accuracy. The “clean” price is on the portfolio page only.”

I think the implication there is possibly that these brokers find it a technical leap too far using their antiquated systems to retrieve the dirty price, and so just use the clean price because it's easier for them, and until recently they haven't had the incentive to fix it because just about zero retail investors were buying index linked gilts at negative yields.

hallmark

GeoffTF said:

Frequentlyhere said:

As have been a few discussions recently about buying gilts, thought I'd share my first experience with buying an Index linked gilt via Halifax Sharedealing, as it might be of interest to someone. It was certainly more eventful than I had planned.

My intention was to dip my toe in and buy £20k of TR50 - An index linked gilt with a current yield to maturity of about 2.35% (post inflation).

I entered the trade online, which went to a 'negotiated trade', I think because of how infrequently the dealing takes place. 

An hour later, a trade confirmation came through - upon inspection I was the proud owner of £10k's worth of TG50, showing a 50% loss on my screen.

As you might well expect, this prompted a call to the team. Unfortunately the rep was clearly not versed in gilts and could not explain it all, but was sure I must have accidentally bought TG50. I, having copied and pasted prices at the buying stage, was as sure as I could possibly be that I had bought TR50

Thankfully as he couldn't explain the valuation discrepancy he called the dealing team. It's good he did because they had just made a flat out error and bought entirely the wrong thing.  

So 1st lesson learned: Take lots of screenshots of your purchase as Halifax send no emails detailing your intended purchase if it goes to negotiated trade.

There was no evidence trail on my side whatsoever to show that I had bought what I said I had, which is a bit poor frankly and in different circumstances could have left me screwed.

After this, I still had apparently substantially less holdings than I had bought, about 45% less, and my portfolio screen shows a 50% loss.  This, it turns out, is because though everyone buys and sells index linked gilts at the dirty price (including accrued interest), the Halifax screen very unhelpfully values your holdings at the clean price which in this case is much much lower. Thread elsewhere I subsequently found talking about this.

I now understand this, but this still seems poor to me - why not show the valuation at the dirty price rather than the messy situation of showiing me holding a substantial loss

So 2nd lesson - if buying index linked gilts via halifax be aware that they only show the 'clean' price valuation and so there will be a (potentially very large) discrepancy in your valuation screen after purchase.

I complained about that several years ago, but they would not fix it. The same happened with AJ Bell and they did fix it. HL shows incorrect valuations online, but correct valuations on the quarterly statements.

Does anybody know how Scottish Widows display ILGs? Am wondering if the SW app will correctly display the dirty price once it's available or if it'll still be the clean price like Iweb?

GeoffTF

hallmark said:

GeoffTF said:

Frequentlyhere said:

As have been a few discussions recently about buying gilts, thought I'd share my first experience with buying an Index linked gilt via Halifax Sharedealing, as it might be of interest to someone. It was certainly more eventful than I had planned.

My intention was to dip my toe in and buy £20k of TR50 - An index linked gilt with a current yield to maturity of about 2.35% (post inflation).

I entered the trade online, which went to a 'negotiated trade', I think because of how infrequently the dealing takes place. 

An hour later, a trade confirmation came through - upon inspection I was the proud owner of £10k's worth of TG50, showing a 50% loss on my screen.

As you might well expect, this prompted a call to the team. Unfortunately the rep was clearly not versed in gilts and could not explain it all, but was sure I must have accidentally bought TG50. I, having copied and pasted prices at the buying stage, was as sure as I could possibly be that I had bought TR50

Thankfully as he couldn't explain the valuation discrepancy he called the dealing team. It's good he did because they had just made a flat out error and bought entirely the wrong thing.  

So 1st lesson learned: Take lots of screenshots of your purchase as Halifax send no emails detailing your intended purchase if it goes to negotiated trade.

There was no evidence trail on my side whatsoever to show that I had bought what I said I had, which is a bit poor frankly and in different circumstances could have left me screwed.

After this, I still had apparently substantially less holdings than I had bought, about 45% less, and my portfolio screen shows a 50% loss.  This, it turns out, is because though everyone buys and sells index linked gilts at the dirty price (including accrued interest), the Halifax screen very unhelpfully values your holdings at the clean price which in this case is much much lower. Thread elsewhere I subsequently found talking about this.

I now understand this, but this still seems poor to me - why not show the valuation at the dirty price rather than the messy situation of showiing me holding a substantial loss

So 2nd lesson - if buying index linked gilts via halifax be aware that they only show the 'clean' price valuation and so there will be a (potentially very large) discrepancy in your valuation screen after purchase.

I complained about that several years ago, but they would not fix it. The same happened with AJ Bell and they did fix it. HL shows incorrect valuations online, but correct valuations on the quarterly statements.

Does anybody know how Scottish Widows display ILGs? Am wondering if the SW app will correctly display the dirty price once it's available or if it'll still be the clean price like Iweb?

I do not know, but I do not think it is likely that the SW app will show a correct valuation. It is possible that lots of complaints may make them think again though.