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Gilt-edged securities, commonly called gilts, are bonds issued by the UK government. They are sterling-denominated, tradeable debt instruments managed by the UK Debt Management Office on behalf of HM Treasury and listed on the London Stock Exchange. The name comes from the original paper certificates issued by the Bank of England, which had gilded (gold-painted) edges.
The British government has never missed a coupon or principal payment on gilts, which makes them one of the lowest credit-risk investments available to any institutional or retail buyer.
When you buy a gilt, you are lending money to the UK government for a fixed period. The government pays you a set interest rate, called the coupon, every six months until the bond reaches its maturity date. At maturity, you receive the face value of the bond back in full.
A 10-year gilt issued with a 4% coupon on a £1,000 face value pays £20 every six months for ten years, then repays the £1,000 at the end. The UK Debt Management Office sets out the maturity and coupon in the gilt's title, for example "4% Treasury Gilt 2034."
The gilt market contains several distinct structures, each suited to different investor needs.
As of the second quarter of 2024, overseas investors held approximately 31% of gilts in issue. Historically, insurance companies and pension funds have been the dominant holders, as gilts provide the long-duration, predictable cash flows these institutions need to match their long-term liabilities.
The Bank of England holds a substantial portion of gilts through its quantitative easing program, which has operated in various forms since 2009. At its peak, the Bank of England held over £800 billion in gilts through its Asset Purchase Facility.
When market interest rates rise, existing gilt prices fall. This is the fundamental inverse relationship in fixed income. Think of it like a fixed-rent lease: if market rents rise, your locked-in lower rent looks less valuable to anyone who might want to buy out your contract.
If a gilt was issued with a 4% coupon and market rates move to 5%, new bonds will offer 5%, making the 4% gilt less attractive. Its price must drop to the point where its effective yield matches the 5% available on new issues. The UK in a Changing Europe explains this relationship clearly: the coupon is fixed, but the yield adjusts through price.
On April 14, 2026, the UK Debt Management Office sold £15.0 billion of a new 10-year gilt, the 4.875% Treasury Gilt 2036, in a single syndicated transaction. The order book reached £148.2 billion nominal, making it the most oversubscribed syndicated gilt offering in history. The launch yield of 4.9158% was the highest for a new 10-year gilt since the 2008 financial crisis.
That level of demand signals the continued strong global appetite for UK sovereign debt despite elevated yield levels.
You can buy gilts directly at auction through the UK Debt Management Office's Approved Groups of Investors program, though most retail investors access gilts through the secondary market via stockbrokers or via gilt exchange-traded funds and mutual funds.
Gilt ETFs trade like regular shares and give you diversified exposure across multiple maturities without requiring the larger capital commitment of buying individual bonds. Unlike holding gilts directly to maturity, ETFs have no fixed endpoint, so you will not receive a defined principal repayment date.
Gilts are the UK equivalent of US Treasury bonds or French OATs (Obligations Assimilables du Trésor). All three are sovereign debt from developed economies with strong institutional credibility. The primary differences lie in currency, tax treatment in each jurisdiction, and interest rate sensitivity relative to each country's monetary policy cycle.
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