A gilt is quoted per £100 of nominal on a clean basis, and the pounds paid at settlement are that quote plus the accrued interest, multiplied by the nominal bought.
A rate per hundred, quoted clean
A gilt's quote is a rate: so many pounds for each £100 of nominal value. It is stated on the clean basis, which means it values the gilt itself and leaves the interest that has built up since the last coupon to be shown separately. A quote of 98.50 is read as £98.50 per £100 of nominal, not as £98.50 for a gilt and not as a total. Everything else about a purchase follows from applying that rate to the nominal bought.
The convention exists so that gilts can be compared on one column regardless of their size or their coupon dates. It also keeps the quote stable as a holding is scaled up or down: the figure a reader sees does not change because they are buying more, and the cash is the only thing that does. Two gilts quoted on the same day are quoted on the same basis, and a reader can compare 98.50 with 101.20 without adjusting for how much of each gilt's coupon period has run. The accrued interest is the adjustment, and it is shown rather than baked in.
Par is the reference point
A quote of 100 means the gilt is trading at par: the price equals the nominal value that will be repaid at maturity. Above 100 is above par and below 100 is below par, and neither is a verdict on the gilt. A gilt quoted below par offers a redemption yield above its coupon, because the buyer will receive £100 at maturity for less than the price paid; a gilt above par offers a yield below its coupon, because the buyer pays more than will be returned.
That relationship is worth keeping in mind whenever a quote looks unusual. A gilt quoted at 88 with a small coupon is not broken; it is priced so that the coupon plus the pull up to par produces the return the market requires for its maturity. It is also why the same gilt can be quoted above par on one date and below it on another when the market's required yield moves across the coupon rate, without any change to the gilt's terms. The quote is the market's answer, and the yield columns are the same answer expressed as a rate of return.
From the quote to the cash
The cash at settlement is the dirty price multiplied by the nominal divided by one hundred. The dirty price is the clean quote plus the accrued interest, and both are per £100 of nominal. The table works one purchase through on illustrative figures, not a quote from any gilt: a clean price of 98.50, accrued interest of 1.23 and a nominal of £5,000.
| Line | Per £100 nominal | On £5,000 nominal |
| Clean price | 98.50 | £4,925.00 |
| Accrued interest | 1.23 | £61.50 |
| Dirty price (cash before fees) | 99.73 | £4,986.50 |
| Income per £100, annual | 4.00 | £200.00 a year |
The two price lines add up to the cash line, and the income line is separate: it is what the gilt pays each year, not what it costs. A reader who confuses the two will read a 4.00 income per £100 as a 4.00% return on the £4,986.50 paid, which is near the running yield on the price paid but is not the redemption yield, because the redemption yield also accounts for the £100 repaid at maturity.
Income per £100 is the coupon, not the return
The income per £100 column is the annual coupon on £100 of nominal. It is fixed by the gilt's terms and does not change with the price, which is why a £5,000 nominal holding of a 4.00% gilt pays £200 a year whether the gilt is quoted at 88 or at 108. The price changes what the buyer pays for that income; it does not change the income itself.
The distinction is the one the yield columns exist to make. The income per £100 tells a reader what the holding pays each year; the redemption yield tells a reader what the holding returns once the price paid and the £100 repaid at maturity are taken into account. For a gilt quoted below par the second is the larger of the two, and for one above par it is the smaller, which is why the two figures can point in different directions without either being wrong.
What a contract note shows
A contract note for a gilt purchase normally lists the nominal, the clean price, the accrued interest and the total consideration, with any dealing cost shown separately. That structure mirrors the quotation: the clean price is the rate, the accrued interest is the interest in transit, and the total is the sum applied to the nominal. The record-a-trade form follows the same structure, deriving the dirty price and the cash from the clean price and the accrued interest entered, so a note can be checked against a booking line by line.
A note that does not reconcile is usually a settlement-date difference rather than a price error. The accrued interest is measured to the settlement date, so a note struck for a later settlement carries more of it. Comparing the note's clean price with the conventional gilts list on the same report date is the way to separate a different price from a different date.
Background, not advice
This article explains how a gilt quote is written and how it becomes the pounds paid at settlement; it is general background, not investment, tax or legal advice for any reader's circumstances. Every figure above is illustrative with its inputs stated, and prices move, so a quote read on one day will differ from the next. The gilt's own record, the day's market data and the contract note are the primary sources for a real price, income or settlement figure.