UK Government Bonds on Fidelity

Nebulous2

I moved my SIPP away from them early last year, partly because I couldn't get gilts. I messaged them to ask and was told no. That was around 13 months ago, but I assume it hasn't changed. 

SVaz

For something you are going to start using  in the next couple of years,  Gilts are pointless,  the coupons lower than the dividends from a short term money market fund.  Interest rates would have to fall below 3% to make Gilts pre 2030 attractive. 

OldScientist

For a bridge of 7 years (9 years including the two year delay):

With a nominal ladder of gilts you would lock in a withdrawal rate of 17% (i.e., £100k would provide £17k nominal for 7 years)

An index linked ladder would give you 14.6%, i.e. £14.6k per £100 invested, but this would go up with inflation)

Obviously, inflation will provide an unknown (and unpredictable) effect on nominal income.

Alternatives (if you cannot move to a platform that does sell individual gilts) - these ignore the two years before withdrawals start:
1) Using an MMF fund, withdrawing 1/N (where N is the number of years left) of the amount remaining each year would give you an initial nominal payout of 14.3% (each year the amount would then increase by the return - currently around 3.5%-3.8% for STMMFs after fees - to provide a modest inflation adjustment). Constant withdrawals can also be used.
2) A ladder can be approximated by using two gilt funds of different maturity ranges to duration match to a virtual ladder (this probably sounds more complicated than it is in practice!). 
3) Fixed term annuity (I believe these are available in both nominal and RPI versions)

LateStarter

Albermarle said:

LateStarter said:

I'm 59, and I plan to use the SIPP to bridge to state pension from 61, .so some part of the SIPP will remain invested for up to 7 years. The intention is to move 1 or 2 years worth into short term money market funds, and keep the last 2 years invested.  For the rest...after a bit of reading, I've run into the concept of the "bond ladder", and the certainty of gilts appeals to me. I'd much rather have lower predictable growth than risk a market crash in the next 5 years. 

Are you saying that the SIPP will be empty after 7 years? If so do you have an other pension provision apart from the state one.
I only ask because if you are intending to draw from the SIPP for many years, it is better not to be cautious with how it is invested.

Yes, the SIPP will be emptied by the end of 7 years. I have my works pension which I plan to draw from age 67. I started the SIPP as a bridging pot to see how early I could go, and it should be in 18-24 months (according to the spreadsheet)

tigerspill

SVaz said:

For something you are going to start using  in the next couple of years,  Gilts are pointless,  the coupons lower than the dividends from a short term money market fund.  Interest rates would have to fall below 3% to make Gilts pre 2030 attractive. 

But it is more than just the coupon - Gilts (Indexers anyway) are a hedge against high or very high inflation which has a value.

OldScientist

SVaz said:

For something you are going to start using  in the next couple of years,  Gilts are pointless,  the coupons lower than the dividends from a short term money market fund.  Interest rates would have to fall below 3% to make Gilts pre 2030 attractive. 

Gilts before 2030 currently have yields in the range of 3.5%-3.9%. Whether the returns will be better than a short term money market fund (at the end of December 2025, the Royal London STMMF had a yield to maturity~4%) over the next 5 years will entirely depend on what happens to the base/SONIA rates. If the base rate goes down, it will be better to hold the gilts, if it goes up it will be better to hold the MMF. What it will do is unknown. However, the gilts provide certainty in cash flows (if not returns) where the MMF provides certainty in neither cash flow nor return.

I also note where they are not held in a tax shelter, the lack of capital gains tax on gilts provides an advantage for those with low coupons (one of the reasons their prices are bid up and yields lower).

incus432

LateStarter said:

I'm (hopefully) within 2 years of retirement, so looking to de-risk, and government bonds are an option I'm considering. I have a SIPP with Fidelity, but can't find gilts on their platform (google search hasn't helped)

Does anyone know if Fidelity supports gilts? How to find them?

Thanks

As others have said Fidelity do not offer the option of holding individual gilts, only bond funds which are a completely different beast. Not great. (They have other serious gaps too , including the the CSH2 MMF) . 

This was their reply to my query why (May 2025)

'Please note, however, that direct ownership of UK Gilts is not currently offered through our platform. While I have submitted feedback on this matter for review, we cannot guarantee if or when direct investment options will be offered.'

Of course many others do allow gilts  -  I hold them with AJBell, iweb/Scottish Widows. I think HL allow too. For me its a good reason to avoid Fidelity.

LateStarter

Well, I've taken the decision to move off Fidelity, I'm looking at Interactive Investor and AJ Bell; does anyone have any feedback on either of those?

Kryten_the_Titan

LateStarter said:

Well, I've taken the decision to move off Fidelity, I'm looking at Interactive Investor and AJ Bell; does anyone have any feedback on either of those?

I have SIPPs with both Fidelity and AJ Bell, they are both good - although annual charge with Fidelity is a little more and AJ Bell offer more fund choice.  I prefer AJ Bell's web interface and yes, AJ Bell allow purchasing of individual gilts, which is why I have a SIPP with them.  I like AJ Bell's X-Ray analysis tool - perfect for statistical geeks.

incus432

I also have accounts with AJ Bell and Fidelity. AJ Bell wins hand down on cost (holding ETFs/gilts), choice (gilts and CSH2 allowed) and user-friendliness.  Like many I tried Fidelity for the cashback offer  but will move when the 18month period is up