Premium Bonds to GIA, as ISA allowance used up.

pbryd

I'm lucky enough to have used this years ISA allowance and I have 47K in my Premium Bonds.

With the PB not doing very well, I was thinking about using the 3K allowance I would have if i used some of the PB money and put it into a GIA.

My thinking is to put 20K into a GIA and invest in worldwide ETF. Then wait until next years ISA allowance is available.

I already have worldwide FTSE ETFs with T212 and Scottish Widow (I-web)

Is there anything I should consider, other than obvious investment can do down as well as up.

Emmia

PB prizes are tax free...

El_Torro

Putting your money in Premium Bonds is very different to putting your money in a global tracker. I don't think that the fact that your Premium Bonds haven't done well lately is enough justification to move from saving to investing. Unless of course you should have been investing all along.

If you won't need the money for 10 years or more and you already have an appropriately sized emergency fund then investing in a GIA with the plan to move to an ISA when you can is not a bad move.

InvesterJones

As above, PBs serve a very different use case than a 100% equities fund. Decide your use case/goal first, then pick the investment that matches it. I'd nearly always chose gilts over PBs for short-medium term.

If you are wanting to use ETFs in a GIA then carefully consider the tax/reporting consequence - it's not just CGT, but perhaps ERI and/or dividends.

pbryd

Thanks for the replies. I have 60% in Stocks and 40% in cash (PB). No mortgage, flat is paid for.

I have opened a SIPP but only put a small amount in atm.

I'm 53, self employed and a basic rate tax payer.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82029001#Comment_82029001

You do realise you are going to get lots of people telling you to put the money in your SIPP, don't you?

pbryd

https://forums.moneysavingexpert.com/discussion/comment/82029021#Comment_82029021

Yes, I have seen SIPPs recommended a lot.

ColdIron

https://forums.moneysavingexpert.com/discussion/6671795/premium-bonds-to-gia-as-isa-allowance-used-up

Is there anything I should consider, other than obvious investment can do down as well as up.

Keep full and accurate records of all trades and any distributions

As GIAs are taxable you need to know your tax liabilities. Your platform will provide an annual Consolidated Tax Certificate but usually this only covers dividends/interest (which will be authoritative) but not capital gains (or losses)

ETFs would be the lowest on my list (over shares, ITs or OEICs) as you will need to factor in ERI (Excess Reportable Income) as these are offshore investments. ERI is rarely (if ever?) covered by your CTC

Personally I would not hold an ETF in a GIA

https://monevator.com/excess-reportable-income

pbryd

https://forums.moneysavingexpert.com/discussion/comment/82029043#Comment_82029043

Thanks for this. It does seem more hassle than it's worth, unless I had hundreds of thousands and the money to pay an expert to keep it all in check.

ColdIron

I'm not suggesting that you don't use a GIA, I have a chunky one myself, just not to hold ETFs. I use Investment Trusts as they are as simple as it gets from a tax PoV. You'll still need to keep accurate records though

EthicsGradient

There are global OEICs with pretty low charges, such as Fidelity Index World (0.12% OCF), that are UK domiciled (so no ERI complications), and if you get the Income version, the tax is pretty simple.