Gilt ladder - How to implement

SVaz

It’s a good time to buy Gilts, prices have dropped 5% the Gilts I bought in October last year (2034-37).

mrklaw

i was getting very good costs for a gilt ladder vs a fixed term level annuity. And I can buy in advance when you can’t do that with an annuity.

norton66

I hold some gilts in my ii SIPP. It was straightforward to implement, they appear in the Bonds section of your SIPP account and coupons are paid into the cash holding.

redpete

I too have a SIPP with ii and I've built a gilt ladder in the ii SIPP. It's not difficult to keep separate.

Notionally I've got 3 separate 'pockets' in my SIPP. About 50% is in accumulating equity trackers. I'm building approximately 5 years' worth of income into a gilt ladder from which I draw income, the balance is in income bond funds, MMF and REITs. (I actually include all investments and savings (SIPPs, ISAs, savings…) in the calculation for the proportion of equities, income funds and gilts.)

To take income I use UFPLS withdrawals whenever a gilt matures. To start with I built the ladder using almost every gilt that was available, I soon realised that the admin to arrange so many UFPLSs was not practical, so now I build it with gilts that mature approx. 5 months apart. Each month I put the cash from income funds and the coupons from gilts into the gilt at the 'top' of the ladder. Once a year I will move an amount from the income funds into the gilt ladder to keep it at around 5 years, and transfer from the equity funds as they grow above a threshold limit. Thus far I have not needed the full amount from a maturing gilt so any cash left over after I make a withdrawal again goes to the top of the ladder.

It sounds more complicated written down like this than it actually is to manage with a couple of spreadsheets. The annual rebalancing is easier with most of the money in the ii SIPP than it would be if I had to transfer between accounts.