You should bear in mind that Nationwide 6.024% PIBS is callable - i.e. repayable only at the issuer's option - on 6/2/2013. So don't rely on it redeeming at that date. In fact, if Nationwide fail to call it in 2013, the coupon resets to 3-month LIBOR plus 50 basis points. On current figures this would give a floating rate coupon of about 1.09% - a rate which might encourage Nationwide to leave the issue in place.

Current return on Nationwide 6.024% is staggeringly high so what does this say about Nationwide. Only thing stopping me piling in is the 15% bid/offer spread which does worry me I must admit!

This is the link to a Pibs explanation on why the return is so attractive from The Building Society Association. I still don't understand what they are and this just confuses me.

"There is a risk that you will not get back your investment if the general level of interest rates changes."

http://www.bsa.org.uk/faq/whatarepibs.htm

On another tack to IanP's risk/reward point at the time that it was thought that Equitable Life MUTUAL could go bust it was authoritatively reported that mutuality works both ways. In other words members would be legally liable for the deficit. The government said, either directly or through leak at the time, that in that eventuality they would bring in emergency legislation; they didn't and I don't think they ever have.

Nationwide 6.024% (call 6/2/13 @100p) at offer price of only 75p and yield to call of 14.62% looks a steal to me - seriously thinking of adding this one to my drawdown pension fund, purely because it's Nationwide, and the redemption date fits in nicely with me approaching 75 then, when I'd have to switch from drawdown to an ASP or annuity.

PIBS are paying a very good rate of return at the moment BUT this is because of the bank crisis. If a Building Society fails PIBS holders are last in line for a payout. In the past there was little chance of this happening but now we have a whole new "ballgame" and as the perceived risk grows the value of the PIBS falls and this makes the return increase.

If you look at current return tables (find them using Google) and compare, say, Nationwide with Halifax you'll see what I mean.......

If you have confidence in a particular Building Society and it's confirmed by the market (ie the return is relatively low) then they could be a very good investment because as the market gains confidence in the banking sector you could make a good capital gain as well a good interest rate....

This is obviously opinion and not advice,,,,,,

We once had some in, I think, the Nottingham Building society and found they gave a worthwhile return. Has anyone any knowledge or advice on these in the current climate?