Bonds are an exciting type of investment available right across the world and this website takes a look at the best bonds in the UK with advice for investors looking to find the most suitable option for their circumstances. It is important to understand that Bondsuk.co.uk is an entirely independent website which aims just to help consumers to find accurate and unbiased advice on the best bonds to buy with in the United Kingdom. There are detailed explanations of each of the main types of bonds and also some discussion on the issuers of them, be it corporate companies or the UK Government Treasury.
Bonds are generally seen as safer methods of investment as opposed to many of the alternatives although their balance of risk will vary considerably across the different types of bonds, so your specific choice is very important. Consumers hold a great variety of different circumstances and as such the private sector will act accordingly to cover all of these requirements and that has led to an increasing number of options when previously the Government's offerings would have been solid and secure but limited in number.
You will find below a categorisation of the major types of bonds with detailed descriptions of each for your interest but before that is more general content about the bonds market with in the UK and pointers on how to find the best ones. In most cases consumers will need to buy from bond funds as the Government itself prefer to only sell in vast quantities to each buyer which is only suitable for corporate companies who have large budgets to play with. Treasury gilts is the normal name given to those issued by the Government and the vast majority of them will actually be bought and sold exclusively between different governments as a way of bringing in funds quickly to cover short term budget gaps, normally caused by unexpected events such as a war or an economic collapse.
The most popular bond used by everyday consumers would probably be fixed rate bonds which offer a guaranteed return and this security will be seen by many as a very appealing factor when browsing through the different attributes of each one under their consideration. A wider and wider section of British society have become interested in investing their money over recent generations and this has meant a considerable rise in the opportunities for those who are qualified to advise them in the best way to proceed, whether it be bonds, savings or other investments. It is crucial that the right advisors are chosen to make sure you take the correct decisions.
For consumers who want to invest into bonds directly or through bond funds there are many financial firms out there who can handle the whole process for you and they will be able to find the best use for your money as they are specialists who will be consistently uptodate on the latest opportunities across the market and can quickly advise you on the best course of action once you have informed them of your own personal situation and also your ambitions for any investment.
Bonds have a number of important terms which you will hear as you research more about them and it is essential that you understand the principal meanings behind each of them in order to fully comprehend what you are reading. We include a description of the most important bond terms below.
Bonds still offer good value for savers, here’s a round-up of the latest products on the market.
Next time you pop into your local Post Office to stock up on stamps for your Christmas cards, you may decide to familiarise yourself with the latest financial products on offer. Allowing savers to keep up with the rising cost of living, the Post Office has this month relaunched its index-linked bonds.
Over a three-year term the new bonds offer at least 0.25 percentage points above any increase in the retail prices index (RPI), the inflation index that includes mortgage interest payments, or 1 percentage point above any rise in RPI over five years. To be eligible savers must put in at least £500 and interest will be paid out on maturity.
As it is almost impossible to earn more than inflation from a regular account, index-linked savings products are in demand. With the best savings bonds currently paying out around 4.6 per cent, but with RPI currently running at 5.2 per cent, higher rate taxpayers must find 8.66 per cent and basic rate taxpayers now need to secure 6.5 per cent on their cash to make a real return.
The Post Office bond is one of the few opportunities available to savers wishing to benefit from inflationary increases now that National Savings & Investment’s (NS&I) popular index-linked bond has been removed from the market.
After 10,000 investors rushed to invest £260m National Grid recently closed its index-linked retail bond issue. The new bond was less beneficial than the Post Office’s previous issue, which for three years paid RPI plus 0.5 percentage points and for five years paid RPI plus 1.5 percentage points.
Savers would be wise to note that unlike NS&I’s index-linked savings certificates, returns from the Post Office are neither compounded nor tax free.
Tracking RPI from December and offering an additional 0.25 per cent and 0.5 per cent respectively, Birmingham Midshires has three and five-year inflation-linked bonds. Although the rates are lower than the Post Office bonds’ accounts can be protected from tax in an individual savings account (ISA).
Maintaining the buying power of money, Yorkshire Building Society offers a six-year bond that pays out the difference in RPI between September 2011 and September 2017 in a tax-free ISA. The catch is that savers can only invest up to £85,000; however they are permitted to transfer in existing funds.
Spanish high street giant and now the fourth largest bank in the world by profits, Santander offers a six-year Index-Linked Savings Bond, paying out 105 per cent of the difference between RPI in November 2011 and November 2017, or 3 per cent minimum if RPI has fallen.
Finally, one alternative that investors can consider is index-linked corporate bonds via the M&G UK Inflation-Linked Corporate Bond fund.
Disclaimer: All of the content found with in BOndsuk.co.uk are provided for the purposes of entertainment only. Please do not use this information for any financial decisions that you make in the future as it is not intended to be used for that. Those looking to buy uk or international bonds or invest in other financial opportunities should consult national consumer bodies who will have the expertise necessary to help you.
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