Permanent Interest Bearing Shares (PIBS)
Permanent Interest Bearing Shares are issued by major building societies. They offer investors a set income - the gross coupon price - paid twice yearly, net of basic rate tax. Traded on the London Stock Exchange, the capital value of Permanent Interest Bearing Shares moves in response to interest rates, as do gilts. If rates rise, the capital value reflected in the buying price falls and vice versa. This in turn determines the gross yield a PIB earns.
Unlike most gilts, PIBs are not redeemable, so you have to find a buyer to offload your holding to - usually through a stockbroker. PIBs are less liquid than gilts, as the second-hand market is relatively small. So it can be harder to find a buyer at any particular price. The amount you get back on your investment depends on the market prices.