Gilt calculator

This tool gives you an idea of the return you could earn over the lifetime of a gilt, assuming you hold it to maturity. 

Here’s how to use the Gilts return calculator: 

1. Select the gilt you’re considering investing in from the dropdown list. 
2. Enter the current market price. You check this in your Freetrade app or by clicking 'Check live price'. 
3. Enter the amount of cash you’re thinking of investing in the gilt. 

The calculator will show you the total estimated return you could get if you bought the gilt at the inputted price and held it to maturity. 

It’ll also show you: 

• How much of this estimated return will come from coupons
• How much of this estimated return will come from the gain or loss realised at maturity
• The running yield
• The yield-to-maturity

Gilts are government bonds. 

When you buy a gilt, you’re lending money to the UK government. When the gilt matures, the government repays you the face value, or nominal value, of the gilt. 

Throughout the life of the gilt, the government also pays you coupons. These are regular dividends paid out every six months at a pre-determined rate. 

Let’s say you hold £1,000 nominal of £TR28 - 6% Gilt 2028. It matures on 7th December 2028, and offers an annual dividend rate of 6%. 

You’d receive £30 every six months until December 2028, at which point the government would pay you one final dividend of £30, as well as repaying you the £1,000 principal. 

Gilts are not subject to Stamp Duty Reserve Tax (SDRT) or capital gains tax. 

The coupons, however, are subject to income tax. Unless, of course, you hold them in an ISA or SIPP. Then you won’t pay any tax on the dividends. 

As a Freetrade Standard or Plus customer, you can buy gilts in your ISA, pension, or general investment account. 

Also known as the coupon, this is the fixed annual interest rate paid to gilt holders, expressed as a percentage of the gilt’s face value. The rate is quoted annually, but paid semi-annually. 

The annual dividend divided by the current market price of the gilt.

The annual return you'll receive if you buy a gilt at the current market price and hold it o maturity. As gilt prices rise, yields fall, and vice versa.