Our Wealth Manager, Sam Ratnage, talks about why people should consider investing in Goverment Gilts now.
Rising interest rates have brought UK government bonds, known as gilts, back into focus for investors seeking income and capital stability. The article explains that gilt yields have increased significantly as the Bank of England has raised interest rates to combat inflation, making them a more attractive option than they have been for many years. As gilts are backed by the UK government, they are generally regarded as lower-risk investments and can play an important role in a diversified portfolio.
The article also highlights the tax advantages that gilts can offer to some investors. While coupon payments are subject to income tax, any capital gains made when gilts mature or are sold are generally exempt from Capital Gains Tax. In a higher interest rate environment, this can make certain gilts particularly appealing for higher-rate and additional-rate taxpayers looking to improve after-tax returns. For investors seeking a balance between risk, income and tax efficiency, gilts may provide an attractive alternative to holding excess cash or relying solely on equity markets.
Read the full article here.
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