Gilt

A gilt-edged security (gilt) is a government bond - a security or stock issued by the government paying a fixed rate of interest and redeemable on a set date for a set amount.

A gilt-edged security (gilt) is a government bond - a security or stock issued by the government paying a fixed rate of interest and redeemable on a set date for a set amount, usually £1,000.

Gilts are considered one of the safest long-term investments, as the government is unlikely to default on its payments. As with most fixed interest-securities or bonds, the price of a gilt is sensitive to interest rates and inflation. As rates rise the price of gilts will fall to bring their yield in line with the market, and as interest rates fall the price of gilts will rise.

A range of gilts are available and can be bought direct by post through the National Savings Stock Register or you can buy them through a stockbroker or bank.

Recommended

Tech stocks teeter as US Treasury bond yields rise
Tech stocks

Tech stocks teeter as US Treasury bond yields rise

The realisation that central banks are about to tighten their monetary policies caused a sell-off in the tech-heavy Nasdaq stock index and the biggest…
14 Jan 2022
Interest rates might rise faster than expected – what does that mean for your money?
Global Economy

Interest rates might rise faster than expected – what does that mean for your money?

The idea that the US Federal Reserve could raise interest rates much earlier than anticipated has upset the markets. John Stepek explains why, and wha…
6 Jan 2022
I wish I knew what a bond was, but I’m too embarrassed to ask
Too embarrassed to ask

I wish I knew what a bond was, but I’m too embarrassed to ask

When thinking of investing many people automatically think of the stockmarket. But there is another market – the bond market. So what exactly is a bon…
7 Dec 2021
Index-linked bonds could prove a costly inflation hedge
Government bonds

Index-linked bonds could prove a costly inflation hedge

Index-linked bonds are designed to keep pace with inflation, but at these prices you are locking in a loss
29 Nov 2021

Most Popular

Five unexpected events that could shock the markets in 2022
Stockmarkets

Five unexpected events that could shock the markets in 2022

Forget Covid-19 – it’s the unexpected twists that will rattle markets in 2022, says Matthew Lynn. Here are five possibilities
31 Dec 2021
US inflation is at its highest since 1982. Why aren’t markets panicking?
Inflation

US inflation is at its highest since 1982. Why aren’t markets panicking?

US inflation is at 7% – the last time it was this high interest rates were at 14%. But instead of panicking, markets just shrugged. John Stepek explai…
13 Jan 2022
Tech stocks teeter as US Treasury bond yields rise
Tech stocks

Tech stocks teeter as US Treasury bond yields rise

The realisation that central banks are about to tighten their monetary policies caused a sell-off in the tech-heavy Nasdaq stock index and the biggest…
14 Jan 2022