Tax Free Investment Options

Newbie_John

https://forums.moneysavingexpert.com/discussion/comment/82116646#Comment_82116646

I meant that 4.5% is guaranteed tax free with TG31 rather than its guaranteed that it will be always more than PB, but I see how that could be read differently.

I see PB as variable tax free acount with 3.8% return if we have £50k and keep for some longer time.

Then TG31 returns 4.5% tax free, so 0.7% more - that's £350 more a year, extra 3x £100, £50 prizes, it's like fixed account with guaranteed return.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82117487#Comment_82117487

No argument about the gilt being fixed but the PB return is variable in two ways - the published rate is subject to change over time, but is only ever an average anyway, so many will achieve better returns, and of course many will be worse, so 3.8% is no more or less than an average.

Not that I'm particularly advocating PBs though, just clarifying a realistic basis on which to make a fair and meaningful comparison…

Newbie_John

https://forums.moneysavingexpert.com/discussion/comment/82117569#Comment_82117569

Agree, Ive tried it two years ago - initially put £20k, won £500 in second month, then excited topped up to max £50k - and finished a year with 2.5% return on full amount. Sure it could have been better, but for low gains I prefer steady gilts and knowing what to expect - on 4.5% return on £50k is like guaranteed win of £175 every month (£187 to be exact, but one could use the spare £12 on lottery tickets to maintain the cahnce of winning £1mln).

Only difference is payment - PB does it monthly, low coupon gilts at maturity.

eskbanker

https://forums.moneysavingexpert.com/discussion/comment/82117960#Comment_82117960

Yes, PBs are never going to suit those looking for a predictable return!

a18041967

Interesting duscussion, not interested in the PB's rights and wrongs and no guarantees but they will be irrelevant option as I'll be maxing out my allowance.

Quite interested in the TG31 gilts and plan to do a little more investigation, thanks

aroominyork

Here is a list of gilts. You can see which have low coupons and hence high proportions of tax-free capital returns. https://www.dividenddata.co.uk/uk-gilts-prices-yields.py