Index-Linked UK Gilts

Index-Linked Gilts

An index-linked gilt is a sterling denominated UK government bond in which the government pays the holder of the gilt two coupon payments per year and a capital repayment on the gilt maturity date. However, unlike conventional gilts, for index-linked gilts, the value of the semi-annual coupon payments and the capital repayment at maturity are adjusted to take account of accrued inflation since the gilt was first issued. This means that as inflation rises, the value of the bond and coupon payments increase. The inflation index used for index-linked gilts is the Retail Price Index (RPI).

Real Yield

The real yield of an index-linked gilt is the expected return above inflation, as measured by the Retail Price Index (RPI) inflation, if the bond is held until the maturity date.

Clean Price

This is the price of the gilt, excluding accrued interest and inflation adjustments. Most brokers will display this clean price until you place an order for the gilt.

Dirty Price

This is the price you would pay if you wish to purchase the gilt. The dirty price is a combination of the clean price of the gilt and accrued interest since the last coupon payment, both of which are then adjusted for inflation from when the gilt was first issued. The dirty price represents the total amount you would pay to purchase the gilt (excluding dealing costs), accounting for both interest and inflation. Click on the symbol on each gilt to see details of the dirty price calculation and also full price history for each gilt.