Two questions the headline yield can't answer: would an index-linked gilt beat a conventional one, and does a gilt beat your savings account after tax? Closing prices as of last available date.
Savings interest is taxed; a cash ISA is tax-free; a gilt's coupon is taxed but its pull-to-par gain is CGT-free. Enter a savings rate and pick a gilt to see what each keeps after tax at your band:
Net figures don't include your Personal Savings Allowance (which can make taxable savings and gilt coupons a little better for smaller balances). A cash ISA is tax-free but uses your £20,000 annual ISA allowance — gilts held outside a wrapper don't. How we calculate net yield.
An index-linked gilt pays a lower headline yield but tracks RPI inflation. It wins only if inflation runs above the break-even rate — the inflation rate at which the two gilts deliver the same return. Pick a similar-maturity pair:
Break-even = (1 + nominal) ÷ (1 + real) − 1. This is the gross, pre-tax comparison the market uses; tax treatment differs (a conventional gilt's coupon and an index-linked gilt's inflation-uplifted coupon are both taxable income, while the inflation uplift on principal is CGT-free). UK index-linked gilts have no deflation floor.
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.