UK Gilts

• Understanding gilt names, pricing and yields▼

  Understanding gilt names

  Treasury 0.125% 31/01/2028

  GBP | GB00BMBL1G81 | BMBL1G8

  The name is usually broken down into 3 parts: the issuer (with gilts this is the UK Treasury), the coupon % and finally the maturity date.

  Underneath are 3 further pieces of data - the currency (for gilts this should be GBP), the ISIN and the SEDOL. The ISIN and SEDOL are identifiers for trading systems and do not have any impact on the investment return.

  Understanding the table

  Coupon (%)MaturityPriceYTM 0% taxYTM 20% taxYTM 40% taxYTM 45% tax

  Coupon (%) - this is the amount paid to the bond holder each year, often bi-annually. It is shown as a percentage. When working out what this means in pounds and pence, you can simply take the percentage of £100. So in the example here, a coupon of 0.125% means a payment of £0.125 or 12.5p per year is paid to the bondholder as interest.

  Maturity date - this is the date that the bond comes to an end and the bond issuer pays the bond holder the maturity (or par) value. The maturity (or par) value is usually £100 per bond.

  Yield to maturity (YTM) - this is the total annual return you'd get if you bought the gilt today and held it to maturity, combining the coupon payments with any gain or loss between the price you pay and the £100 par value you'll receive back. The YTM shown is gross, before tax. What you actually keep depends on your income tax band, since coupon payments are taxed as income while any capital gain is exempt from UK Capital Gains Tax. That's why the table breaks YTM out by tax rate.

  The YTM is for information only and applies to UK tax residents. It's not a substitute for professional tax advice.

Data provided by NetBuilder