Gilts

Gilts, or Gilt Edged Securities, are UK government bonds. They are issued to investors as a way of borrowing money and pay the holder the entire initial capital as well as a fixed rate of interest over a set period. Gilt investments are ideally suited towards cautious investors that would like to see a fixed steady income stream with their capital returns 100 per cent guaranteed.

There are several different types of gilts available to investors. The term of the policy will vary from just a few years for short dates to others where interest is paid over the long term, known as long dates. Some types of gilts are index-linked with returns related to inflation, and others are strippable meaning that interest and returns can be traded separately in the market.

Like all investment products, gilts will vary depending on the type on offer as will your suitability for purchasing one. It is advisable that you shop around and compare gilts before considering any investment.

Gilts offer answer to save/spend dilemma

The UK faces a crossroads, where government stimulus plans are based on increases in spending, but faced with a recession Brits are wanting to consolidate and save.