Guide

How to buy gilts in the UK

Buying a gilt is much like buying a share: through an investment platform or broker, in a general account, an ISA or a SIPP. Here’s how it works, step by step, and what to check before you deal.

1. Choose where to hold it

Most UK investment platforms let you buy gilts — for example Hargreaves Lansdown, AJ Bell and interactive investor, among others. Check that yours offers gilts (not just gilt funds) and what it charges to deal.

General investment account — coupons are taxed as income; gains are free of capital gains tax. Low-coupon gilts are usually best here.
Stocks & shares ISA — no tax at all, so compare gross yields. Gilts go in a stocks & shares ISA rather than a cash ISA.
SIPP — no tax while invested; tax applies to pension withdrawals under the usual pension rules.

You can also buy directly from the government through the UK Debt Management Office’s Approved Group of Investors purchase and sale service, run with Computershare. You need to be a UK resident and pass identity checks; see the DMO’s page for details.

2. Pick the gilt

Every gilt has a short code (its EPIC, such as TG27) and an ISIN. Decide when you want your money back, then compare the gilts maturing around then after tax — the gilt table shows every gilt at your tax rate, and each gilt page lists its EPIC and ISIN to search for on your platform. Higher-rate taxpayer? Start with the best gilts for higher-rate taxpayers.

3. Understand the price you pay

Prices are per £100 of face value. A price of £95 means £95 buys £100 that is repaid at maturity.
Clean vs dirty price. The quoted price is “clean”. You also pay the seller the interest built up since the last coupon (accrued interest); you get it back in the next coupon. The total is the “dirty” price.
Settlement is T+1 — the next business day after you deal.
Buying and selling prices differ. Platforms quote a spread; prices on YieldSmart are indicative mid-prices, so the price you deal at will be slightly different.
Platforms work in amounts of money or face value — check which one you’re entering, and whether there’s a minimum.

4. Hold to maturity — or not

Held to maturity, you receive every coupon and £100 for every £100 of face value on the redemption date. If you sell earlier you get the market price, which depends on interest rates at the time. A gain on a gilt is free of capital gains tax whenever you sell; a loss can’t be set against other gains. Interest accrued at sale is taxed as income for holdings over £5,000 face value (the Accrued Income Scheme).

Before you deal: check the gilt’s maturity date, its after-tax yield at your rate, and your platform’s dealing charge — on a small purchase a fixed fee can take a noticeable bite out of the yield.

Want cash on several dates? The ladder builder picks a gilt for each year and shows the cost today. To weigh a gilt against keeping cash, see gilts vs a savings account.

Information only — not financial advice. Gilt prices are indicative from last available close and may be delayed. Verify before transacting. UK tax treatment depends on your circumstances and may change.