Protect your portfolio against inflation

Share

• Copy link
• Facebook
• X
• Linkedin
• Whatsapp
• Pinterest

Share this article

Join the conversation

Follow us

Add us as a preferred source on Google

Newsletter

Get the MoneyWeek Newsletter

Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Contact me with news and offers from other Future brands Receive email from us on behalf of our trusted partners or sponsors

---

By submitting your information you agree to the Terms & Conditions and Privacy Policy and are aged 16 or over.

You are now subscribed

Your newsletter sign-up was successful

---

Want to add more newsletters?

Twice daily

MoneyWeek

Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Signup +

Four times a week

Look After My Bills

Sign up to our free money-saving newsletter, filled with the latest news and expert advice to help you find the best tips and deals for managing your bills. Start saving today!

Signup +

---

An account already exists for this email address, please log in.

Subscribe to our newsletter

With signs of inflation mounting, risk-averse investors should keep in mind the option of index-linked gilts that is, government bonds that shield investors from inflation.

With index-linked government stock, both the income and the price at which it will be redeemed are adjusted to take account of movement in the retail price index (RPI).

But the price paid for this protection is a lower coupon, so if you buy it after it has been issued (in the secondary market), your yield will also be lower than that of a conventional gilt.

MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up

The index-linked gilt maturing in 2009, for instance, pays a coupon of 2.5%, and currently yields 1.7%.

There are currently index-linked gilts with redemption dates ranging from 2006 to 2055 in existence. Index-linked gilts can be bought in the secondary market through brokers, though if you want to guard against a price fall, you should buy at issue and hold to maturity.

Bonds are issued in auctions by the Debt Management Office, where investors need to join the Approved Group' of investors to participate.

See the guide to gilts at the UK Debt Management Office website for more information on index-linked gilts.