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UK Gilt Ladder Builder | After-Tax Yield & Maturity Planner
Build up to six conventional-gilt rungs using your own all-in prices, then compare purchase cost, redemption cash, coupons, estimated coupon tax, after-tax yield and duration risk.
1 Enter your figures2 Review assumptions3 Explore the result
Gilt catalogue: 21 Aug 2026.Prices are your inputs. The builder has no live market-price feed.
Your figures
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Planned nominal cash at maturity
£30,000£30,036 estimated purchase cost across 3 rungs, using your all-in prices and dealing costs.After-tax annualised return0.19%Irregular cash-flow return if every gilt is held to maturity
Coupon tax estimate£125£313 gross coupons before tax
Approx. +1pp price sensitivity−2.67%Modified duration about 2.7 years
Redemption ladder and return anatomy
Rows are ordered by maturity, regardless of input order.
| Maturity | Gilt | Coupon | Target redemption | Purchase cost | Gross coupons | Coupon tax | Price-to-par change | After-tax yield |
|---|---|---|---|---|---|---|---|---|
| 31 Jan 2028 | 0⅛% Treasury Gilt 2028GB00BMBL1G81 | 0.125% | £10,000 | £10,012 | £19 | £8 | £0 | -0.01% |
| 31 Jan 2029 | 0½% Treasury Gilt 2029GB00BLPK7227 | 0.500% | £10,000 | £10,012 | £125 | £50 | £0 | 0.26% |
| 22 Oct 2030 | 0⅜% Treasury Gilt 2030GB00BL68HH02 | 0.375% | £10,000 | £10,012 | £169 | £68 | £0 | 0.21% |
| Ladder total | £30,000 | £30,036 | £313 | £125 | £0 | 0.19% | ||
100% of planned redemption uses gilts with coupons of 1% or less.
For a qualifying direct gilt held by a UK individual outside a tax wrapper, coupons are taxable savings income while a price gain is generally exempt from Capital Gains Tax. Low coupon does not automatically mean the highest after-tax yield: price, maturity, accrued interest, costs and tax all matter. Review the gilt guide and full issue table.
Ladder risk check
The redemption-weighted term is 2.7 years, the longest rung is 4.2 years and the largest rung is 33% of planned redemption. A roughly 2.7-year modified duration suggests an immediate one-percentage-point yield rise could reduce market value by about 2.67% before convexity, although holding to maturity restores the fixed nominal redemption if the UK government pays as promised.
Assumptions used
- Every rung is a conventional UK gilt held directly to maturity; index-linked gilts and gilt funds are excluded.
- The all-in price includes accrued interest. Coupon-tax estimates apply the selected rate to every full coupon and do not model Accrued Income Scheme relief on purchase.
- Coupons are generated from the DMO’s scheduled semi-annual dates strictly after the entered settlement date. Ex-dividend entitlement and broker settlement cut-offs are excluded.
- Qualifying gilt price gains are treated as exempt from UK Capital Gains Tax for an individual; coupons are treated as savings income.
- The annualised result is an XIRR over modelled after-tax cash flows. It assumes coupons are not reinvested and tax is paid on each coupon without timing delay.
- Modified duration gives a first-order market-price sensitivity, not a forecast. Convexity, liquidity, bid-offer spreads and changing yields can alter an early-sale outcome.
A ladder solves a timing problem, not a return-maximisation problem. Start with the dates and amounts of future cash needs, then compare executable prices across suitable maturities.
Common questions
Gilt ladder FAQs
What is a gilt ladder?
A gilt ladder is a set of individual UK government bonds with different maturity dates. Each rung can be matched to a future cash need. If held to maturity, a conventional gilt pays its fixed coupons and £100 nominal redemption for each £100 nominal held, subject to UK government credit risk.
Why does the builder require an all-in or dirty price?
The clean quoted price excludes accrued coupon interest, while the cash paid normally includes it. An all-in price makes purchase cost and yield more comparable. Use an executable broker quote, because the builder deliberately has no live price feed and £100 defaults are only neutral scaffolding.
How are gilts taxed for a UK individual?
Coupons from a directly held gilt are generally taxable as savings income. Capital gains on qualifying UK gilts are generally exempt from Capital Gains Tax for individuals. ISA or pension wrappers can change the tax position. The builder applies only the marginal coupon-tax rate selected.
Why can a low-coupon gilt be tax-efficient?
When a qualifying low-coupon gilt is bought below par, more of its return may come from the generally CGT-exempt move towards £100 redemption and less from taxable coupons. The best after-tax outcome still depends on the executable price, accrued interest, time to maturity, costs and personal tax position.
What does after-tax yield mean here?
It is an annualised XIRR using the entered purchase cost, scheduled coupons after the selected tax rate and £100-per-£100 nominal redemption. Coupons are not assumed to be reinvested. Accrued Income Scheme relief, tax-payment timing and changing tax rates are excluded.
What is duration risk?
Duration estimates how sensitive a gilt's market price is to changing yields. A modified duration of five years suggests that a one-percentage-point yield rise could reduce price by roughly 5% initially, before allowing for convexity. The effect matters if a gilt may need to be sold before maturity.
Does holding a gilt to maturity remove all risk?
It removes uncertainty about the nominal redemption amount if the UK government pays as promised, but not inflation risk, opportunity cost, tax changes, reinvestment risk on coupons or the risk that you need the cash early. A long maturity can be a poor match for a near-term liability.
Does the calculation include the Accrued Income Scheme?
No. The entered all-in price includes accrued interest economically, but coupon tax is estimated on full scheduled coupons without a purchase adjustment. The Accrued Income Scheme can affect taxable interest around a purchase or sale, so use tax records for an actual return.
Can I use index-linked gilts in the ladder?
Not in this version. Index-linked coupons and principal change with inflation and can involve three- or eight-month indexation lags, making cash-flow and tax modelling materially different. The builder uses conventional nominal gilts only.