UK gilts explained: why they're back in focus for investors

In this episode of Inside the Markets, Katie Sykes, Investment Marketing Specialist, is joined by Craig Melling, Director of Investment, to explain why UK gilts are back in focus for investors.

Using the example of a £100 government IOU, they break down what coupon, price, maturity and yield mean, explain why gilt prices and yields move in opposite directions, and explore the factors currently influencing the gilt market. They also consider whether gilts are genuinely ‘safe’, how returns can come from both interest and price, and why the distinction matters for tax.

The discussion examines the potential role of gilts in generating income, diversifying a portfolio and matching money to future needs, while highlighting the risks investors should understand and why the highest headline yield does not necessarily produce the highest return after tax.