Does anyone know what permanent interest bearing shares are how do you buy then and how many do you have to buy as a minimum?

Joalti

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JWHignett

Permanent interest bearing shares are issued by building societies and pay a fixed rate of interest. They cannot be sold back to the society but can be bought and sold on the stock exchange, which means the price varies.

Pibs are not risk-free. Though they are shares, they behave like bonds. If interest rates rise, their price falls. But if rates fall, capital values rise.

If your Pibs issuer gets into difficulty, you could lose money. The Financial Services Compensation Scheme does not cover them. That said, building societies are - generally - considered to be very low risk.

In terms of where to buy a PIB, you can do so through any stockbroker. There is generally no set investment minimum, but stockbrokers' dealing costs make investments of say, under £1,000-£1,500 uneconomic.

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Editor, moneysupermarket.com

Hi Nic

Many thanks for that info.

 

joalti

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JWHignett

I have quite a few small PIBS holdings which I bought through my Bank years ago but now they say they don't deal deal in them so how do I find someone who does (at a reasonable price)

Thanks for that Adrian

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JWHignett

You can get a list of PIBS, the minimum amount to purchase and current trading price at www.collins-stewart.com

You can also get daily trading prices at www.thisismoney.co.uk

I trade mine through my stockbroker Hargreaves Lansdowne www.hargreaveslansdown.co.uk

In my opinion this is not a particularly good time to buy to make a trading profit as interest rates are rising but if you want a long term fixed interest rate they are a serious consideration.

This is,of course, opinion not advice

Very interesting thanks

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JWHignett

I have PIBS in Brittania and Bradford and Bingley but I have not been able to establish whether they are still trading or whether I lost out in the recent "rescue". Can anybody help?

Bradford & Bingley are not very sound at the moment (but are still trading although at a very low trading price). This is because nobody knows if they will be "saved" by nationalisation or not. The Northern Rock ones are still trading and paying interest and the B & B 13% ones paid interest last time so hopefully they won't be dumped by the Government.....

Brittania are different because they are not in financial difficulty so unless things change they're ok....

The main problem is because PIBS are unsecured the market is very nervous but if it begins to look like the end of bankrupt banks then they could be a good investment particularly as they are "cheap" now and falling interest rates will also increase their value.

As I said before this is opinion not advice.....especially in today's dodgy market!!

I thought Santander had taken over Bradford and and Bingleys's savings accounts and offices, with our government taking over B&B's mortgages and liabilities. I'm not sure where that places PIBs, bit I'd have thought they were a lot safer now than they were previously, whichever way you look at it.

Yes, that's right and PIBS (or PSBs as they are now B&B is a bank) fall into the "liability" part of this mess and so far nobody has clarified their situation.....that's why their trading price is so low. At the price they are now they'd make a good punt for a gambler!!