Understanding gilts: a guide to UK government bonds
What a gilt actually is — a loan to HM Treasury that pays interest and returns your £100 nominal at maturity — and how conventional and index-linked gilts differ.
Articles tagged basics
Guides to gilts and to using GiltIQ, written against the site's own data and pages.
Featured
Pages
Who issues gilts, and how much is in issue
Gilts are issued by the UK Debt Management Office on behalf of HM Treasury, and the outstanding nominal per gilt sits beside its DMO yield on the gilt's own record.
Articles
Nominal and index-linked gilts compared
A nominal gilt fixes the pounds it pays while an index-linked gilt fixes their purchasing power, and comparing the two shows the inflation the market is pricing in as impl. RPI.
Why gilts pay a fixed amount of cash
A conventional gilt pays a fixed coupon in pounds because the amount is written into its terms at issue, and the real return on that fixed cash depends on the inflation that follows.
A gilt and a corporate bond on one cash-flow basis
A gilt and a corporate bond both pay a fixed coupon and repay a nominal, so putting them on one cash-flow basis shows the yield gap between government and company borrowing.
Treasury bills and gilts: how short government debt differs
A Treasury bill is short-dated government borrowing that pays no coupon and is bought at a discount to face value, while a gilt pays a coupon over a longer life — and the two are measured on different yield conventions.
Why gilt prices move when yields change
A gilt's price falls when its yield rises and rises when its yield falls, because a fixed coupon has to be repriced to match what the market now demands — and the Change column shows that movement.
Gilt strips and zero-coupon exposure
A gilt strip separates a gilt's individual coupon payments and final repayment into stand-alone securities that each pay only at a set date, so a strip behaves like a zero-coupon bond.
How conventional and index-linked gilts differ
Conventional gilts pay the same cash coupon whatever happens to prices, while index-linked gilts scale both the coupon and the repayment by the index ratio so the cash keeps pace with measured inflation.
Guides
Gilt jargon in plain English
A plain-English glossary of the terms a gilt list uses — coupon, clean price, accrued interest, dirty price, yield and more — so each column name maps to a figure the page computes.
What a coupon actually pays
A coupon is a fixed percentage of nominal paid twice a year, and the cash it pays stays the same whatever the gilt's price — which is why the coupon and the yield answer different questions.
What a gilt actually is
A gilt is a loan to the UK government that pays a fixed coupon for its life and repays £100 of nominal at maturity, so owning one means owning a known stream of cash rather than a share of anything.
Reading a gilt quote: clean, accrued and dirty
A gilt quote shows three prices — the clean price, the accrued interest and the dirty price — and reading a single row means telling apart what the gilt is worth, what interest has built up, and what a buyer actually pays.