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Savings and Investments thread
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More lender mortgage rates been sent to me today. Scottish Widows being the most expensive with 5 year fixed at 6.49% for a 60% LTV, whereas Barclays are offering their existing customers 4.89% for the same LTV.
Halifax meanwhile have their 5 year fix at 5.44% for all LTV's up to 90%. Their 2 year fixed is 5.84%.0 -
Ditto.redman said:
I had certificate shares. On looking around it seemed clear it was cheaper to transfer them to uncertified first and then sell them. Depends on the value though and also takes longer with the exptra process. I used halifax who were pretty efficent but suspect there are cheaperFortune 82nd Minute said:I've got a few shares held in certificate form that I want to sell.
Anyone able to recommend a [relatively] cheap and reliable place where I can sell them.
Seen the sellmysharecertificates.com site Anyone used it?0 -
What was portrayed was the collapse of pension funds. That was not happening. Any pension funds which had no hedging or partial hedging saw significant surpluses overnight.PragueAddick said:
Well, I'll freely admit I can't get my head around this, so I'll just hope you are right. Not least because I dipped in and bought some Direct Line and LG shares today, and the latter appears to be especially in the mix on this. I took the view the market was already pricing in some fall-out from this for them. I don't know if you have read/can read the article but there are some pretty heavy duty comments on there which seem a lot less sanguine than you are.Dippenhall said:
Some pension funds did interest rate swaps where a bank pays a fixed rate of interest and the pension fund pays a market rate of interest. Without trying to explain how, you can take it that pension funds pay additional cash as collateral for the increased exposure under the swap contract when interest rates rise and the pension fund has to cover the higher interest payments. BUT the loss is covered by the reduced value of assets the pension fund needs. The pension fund has matched its liabilities and there is no risk to pensioners. The problem is that pension funds have to sell the surplus assets to meet both cash call and this can move the market temporarily. So it’s a short term liquidity issue, not an increase in pensioner risk. The interest rate swap has behaved as it would be expected and the surprise is because pension fund trustees didn’t understand what’ they had entered into by selling off in advance the value of surplus assets through derivatives.PragueAddick said:
So if I understand the adults in the media room, this is exactly what has been happening?WishIdStayedinthePub said:
Spot on. Reports that 'pension funds' were close to meltdown due to cash calls can't be right for the reasons you state - why would pension funds be leveraged? Intervention due to general financial instability ... maybe.Dippenhall said:Pension Fund Crisis - What crisis?
Don't know if anyone has picked up that on the one hand we are told pension funds are collapsing and need to be protected by B of E intervention on interest rates and the value of the pound, and on the other hand final salary pension schemes have massively improved their funding position and now likely to have surplus funds. Companies with legacy final salary schemes are jumping for joy at the fall in the value of bonds and gilts. The overall value of these pension funds can fall yet they can be holding more investments than needed to pay their pensioners.
There's no difference between the cost of a pension guaranteed by a final salary scheme and the cost of a pension funded from an individual's personal pension pot, so why a crisis for some pensions and not for others.
The difference is that individuals, without any conscious decision, choose to fund pension income from capital growth, which tends to be volatile and unpredictable. On the other hand, companies funding final salary guarantees are forced by regulation to buy advance income in the form of bonds and gilts. If interest rates are low, as they have been for decades, the cost of buying £1 of income is high because the price of gilts is high and vice versa. If interest rates are rising (their yield increases) as now, the price of gilts falls and the effect is that £1 buys more guaranteed income i.e a 1% yield is expensive and a 5% yield is cheap.
Individuals intuitively choose to take more risk by relying more on capital growth prior to retirement BUT as soon as they retire and need to draw down income they should be thinking more like a company that has a liability to fund a secure income stream. The obsession with fund values falling and rising is irrelevant once you have a basket of bonds and gilts providing a pre-set income yield regardless of what its capital value is. If you need income, what's more valuable - £100K yielding 5% or £200k yielding 1%? In the growth phase before retirement you are targeting as large a cash pot at retirement as possible that you can convert to income at retirement. Short term fund value volatility far from retirement is just noise, but as you approach retirement you should not be so concerned with fund value if your pension pot, like a final salary scheme, has at least in part bought future income in the form of bonds and gilts. If you are close to, or in retirement, and still invested wholly in equities you are choosing to rely on capital growth and you are bearing the full risk of market volatility affecting capital values. "Lifestyle" investing is the norm for many pension products and this product automatically does the de-risking into bonds and gilts as you approach retirement without you having to take any action.
The fall in the value of the pound means pension funds invested in non-UK investments are filling their boots with increased value as Dollars earned overseas are converted into ever more pounds. Most fund managers offer two varieties of overseas fund investments - those which bear the currency exchange risk and those which hedge the Sterling currency exchange risk. The latter will perform below un-hedged funds all the time sterling is weak. In fact currency exchange gains in un-hedged funds account for a significant percentage of the buoyant performance of overseas equity investment.
Inflation is the risk that pension investors approaching should be most concerned with.
Investors suffering the most as a result of high interest rates, falling UK markets and falling pound are those which are poorly managed or are obsessed with prevailing fund value.
Liability Driven Investment rules dictate that they match their liabilities, largely government or very high investment grade bonds which they would intend to hold to maturity and therefore would know their gross redemption yield at the start. I suppose it is possible that some were panicking due to inflation and trying to hedge that with derivatives? That would be another scandal brewing, if true.
It' a happy coincidence that the Bank's intervention will keep borrowing costs down for the Government, of course. Anyone still think that any of the central banks are actually independent? Lol.
Schemes which hedged interest rate volatility stayed in equilibrium, no surplus or deficit - the whole point of hedging.
The problem was banks wanting additional collateral to cover the additional amounts pension funds now owed the bank under the derivative contract (more than coveted by its assets). If they only held gilts they had to sell them - and the main buyers of gilts are pension funds - so the market wasn’t there to prevent a chaotic market.What the BofE did is what they are there for - to stabalise the market in abnormal conditions - it wasn’t to save pension funds. Pension funds benefit from high yield gilts and don’t care how low the price goes - it’s the market that collapsed - not pension funds.
Its an example of how a relatively simple derivative is seen as benign until it becomes apparent that unexpected events create liquidity issues for a counter party no one had foreseen.
The result will probably be pension funds holding equities to cover the risk of unexpected cash calls for collateral - end of problem no one thought of as their problem.3 -
1 x £25 here0
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2 x £25 for me.1
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2x £25 for me (on now a reduced holding), 1x £100 for Mrs R7L, eldest daughter nowt, youngest 3x £25.0
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I’m very jealous of anyone winning £100 or more in a single win - never had more than £25 since buying PSBs 2 years ago. I’m up to the maximum now too. Out of interest, what’s the largest, single amount anyone on here has won?Rob7Lee said:2x £25 for me (on now a reduced holding), 1x £100 for Mrs R7L, eldest daughter nowt, youngest 3x £25.0 -
£25 This month.
Largest ever win £100.0 -
£150 for my father in law, he was simply born lucky! 1x £100 and 2x £25.meldrew66 said:
I’m very jealous of anyone winning £100 or more in a single win - never had more than £25 since buying PSBs 2 years ago. I’m up to the maximum now too. Out of interest, what’s the largest, single amount anyone on here has won?Rob7Lee said:2x £25 for me (on now a reduced holding), 1x £100 for Mrs R7L, eldest daughter nowt, youngest 3x £25.
My largest single bond win is £100, my Aunt had a £500 about 3 years ago after I persuaded her to get some, won in her first month! (on £30k).0 -
1 x £100, 4 x £25
Easily my best month. Has the prize fund gone up with interest rates?0 - Sponsored links:
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2.2% now I believe, was 1.4%newyorkaddick said:1 x £100, 4 x £25
Easily my best month. Has the prize fund gone up with interest rates?
So in theory on the maximum holding on average you should win between £75 and £100 a month.0 -
£25 on the premium bonds. Almost makes up the drop in my pension fund in the past quarter, when it went down by a staggering £87! That's partly because about 35% of it is in USD. 8% down YTD, which I'm not complaining about.0
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Really? Never got the email on that.Rob7Lee said:
2.2% now I believe, was 1.4%newyorkaddick said:1 x £100, 4 x £25
Easily my best month. Has the prize fund gone up with interest rates?
So in theory on the maximum holding on average you should win between £75 and £100 a month.
Aaand I got £200, I think I got that much once before but certainly no more than that.
If it's really 2.2% that is the highest for years and outpacing every single one of the six cash savings accounts I hold where I've distributed cash from the house sale. Hmm.0 -
https://www.moneysavingexpert.com/news/2022/09/ns-i-premium-bond-rate/PragueAddick said:
Really? Never got the email on that.Rob7Lee said:
2.2% now I believe, was 1.4%newyorkaddick said:1 x £100, 4 x £25
Easily my best month. Has the prize fund gone up with interest rates?
So in theory on the maximum holding on average you should win between £75 and £100 a month.
Aaand I got £200, I think I got that much once before but certainly no more than that.
If it's really 2.2% that is the highest for years and outpacing every single one of the six cash savings accounts I hold where I've distributed cash from the house sale. Hmm.
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Value of prize Number of prizes in September 2022 Number of prizes (estimated) in October 2022 £1,000,000 2 2 £100,000 10 18
£50,000 20 35
£25,000 39
72
£10,000 98
178
£5,000 199
357
£1,000 2,779
4,364
£500 8,337
13,092
£100 38,137
728,737
£50 38,137
728,737
£25 4,774,798
3,484,716
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£75 me £25 wife. On the p bonds0
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Separately I was going to mention a couple of things when it comes to funds, and diversifying.
Firstly a bare stat and I can't remember where I read it but basically it pointed out that retail investors generally hold at least 25% in UK focused funds, while the UK stock markets make up only 4% of a key global index. In some ways this is inevitable given the way retail investors get into funds, and the platforms that deal in them, but it made me think hard, even though I've been a bit lary about the UK for some time. Since Johnson got the keys to No10, in fact.
As for where else, this article in the FT from the Unhedged crew (another crew along with the Alphaville team that I think know their stuff) convinced me that it's time to have a bit more of Japan. For years the market has underperformed, despite most of us owning something in our home or garage that is Japanese. Could be finally the time. I certainly dipped in yesterday. I already had the fund I wanted, part of the package of reccos I got from @golfaddick in his professional capacity, which has been out-performing in the package. But I happened to check on a Japanese fund I'd held in my SIPP for ages (AXA Framlington Japan). Golfie's fund is out-performing it since the beginning of the year by over 20 percentage points, which is a lot!. Now of course we are also told to have longer horizons for our funds, but despite there being a period in the last 5 years where the AXA fund was looking for more promising,, over five years the Golfie fund is delivering 7.4% vs the AXA fund 3.6%. (both are pathetic returns over five years of course, which is why Japan has been ignored for so long). So I immediately swapped it.
Well, it gave me food for thought, anyway. One lesson is clear. Check all your funds regularly!1 -
Thanks, needed to read that. Not least for this pointRob7Lee said:
https://www.moneysavingexpert.com/news/2022/09/ns-i-premium-bond-rate/PragueAddick said:
Really? Never got the email on that.Rob7Lee said:
2.2% now I believe, was 1.4%newyorkaddick said:1 x £100, 4 x £25
Easily my best month. Has the prize fund gone up with interest rates?
So in theory on the maximum holding on average you should win between £75 and £100 a month.
Aaand I got £200, I think I got that much once before but certainly no more than that.
If it's really 2.2% that is the highest for years and outpacing every single one of the six cash savings accounts I hold where I've distributed cash from the house sale. Hmm.But for most savers with average luck, and who don't pay tax on savings interest, normal savings are still likely to beat Premium Bonds. This is because savings pay a constant rate of interest – so if you get the top easy-access rate of 2.5%, you'd get roughly £25 in interest for every £1,000 saved. Though this rate is variable, it provides more certainty than Premium Bonds, where many saving the same £1,000 would win nothing.
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Premium bonds has never been the best return/home for cash. But many like the safety, tax free and chance to do better! Personally I think it's only worth doing if you have £30k+
That said one of the £50k winners this month has £600 of bonds, bought a little over two years ago, so not a bad return! There was even a £50k winner who had £100 of bonds bought nearly 20 years ago.0 -
£75 for Mrs Chaz, £50 for jnr and bugger all for me this month
Had a good run recently so shouldn’t complain but I will. In answer to the biggest amount won with an individual bond it is £100 for me. A friend of my wife won £20,000 some years ago.1 - Sponsored links:
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Well, we've hit the "Jackpot" this month....well by far the most we've ever won.
£75 Mr F
A whopping £175 for me !
That's our spending money for Tenerife sorted !5 -
when the payour rate was 1.4%, I believe the median person (person in the middle/average profile) was about 1%. So effectively 1% to normal payouts and .4% to the lottery for the big prizes. My benchmark for comparing saving rates was therefore 1%.PragueAddick said:
Thanks, needed to read that. Not least for this pointRob7Lee said:
https://www.moneysavingexpert.com/news/2022/09/ns-i-premium-bond-rate/PragueAddick said:
Really? Never got the email on that.Rob7Lee said:
2.2% now I believe, was 1.4%newyorkaddick said:1 x £100, 4 x £25
Easily my best month. Has the prize fund gone up with interest rates?
So in theory on the maximum holding on average you should win between £75 and £100 a month.
Aaand I got £200, I think I got that much once before but certainly no more than that.
If it's really 2.2% that is the highest for years and outpacing every single one of the six cash savings accounts I hold where I've distributed cash from the house sale. Hmm.But for most savers with average luck, and who don't pay tax on savings interest, normal savings are still likely to beat Premium Bonds. This is because savings pay a constant rate of interest – so if you get the top easy-access rate of 2.5%, you'd get roughly £25 in interest for every £1,000 saved. Though this rate is variable, it provides more certainty than Premium Bonds, where many saving the same £1,000 would win nothing.
Not sure what the figures are now itit's risen to 2.2%, but may be 1.5%. This still beats most big savings instistitutions instant access rates. Nationwide as one of the best, you can get 1.6% if you count as a loyalty customer. Other large institutions considerably worse!1 -
@redman yes it seems to me that most banks, even some of the smaller ones, are still sitting on their hands. I will probably go for a six month bond with Charter Savings Bank at 3.1% but that´s easily the best I can get right now, and I dont want to take it until a 95 day notice account closes beginning December, because I am wary of the £85k guarantee limit. Otherwise 2.1% is the best I have, and thats for a nine month bond.
There has to be a new round of better offers coming soon, I would have thought.
Mind you any punter in the Eurozone can only dream of such offers. I’ve been lucky moving money across to Czech accounts offering 5.3%, and well before Blundertruss crashed the pound, albeit the context is inflation at 17.2%. I’m happy with that even if most of the money is earmarked for purchases in the next few months.Never thought I’d be setting up web pages that monitor currencies….0 -
Virgin Money are paying 4% on a 1 year fixed rate.
I have some money coming from my house sale. I'll be maxing out the PB's and then some into an ISA with the rest in a 1 year fixed rate bond. Will need the money in 1-2 years for a new house purchase.1 -
That's more like it then. Unfortunately I ditched my account with them a few months ago as they were uncompetitive.golfaddick said:Virgin Money are paying 4% on a 1 year fixed rate.
I have some money coming from my house sale. I'll be maxing out the PB's and then some into an ISA with the rest in a 1 year fixed rate bond. Will need the money in 1-2 years for a new house purchase.0 -
Atom 4.11% for 1 year fix0
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FCS protection - and Secure Trust are a UK bank and have been going for 70 years.PragueAddick said:1 -
Good link. Just check banks are UK Regulated as you are secured up to £85k.
https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/
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