How we calculate every number on YieldSmart.

Data and timeliness

Prices are indicative closing prices from the last available business day, sourced from published UK gilt reference data (the Debt Management Office gilt register for instrument details, with end-of-day market prices). They are not real-time and may be delayed. Always verify the live price with your broker before transacting.

Each gilt's coupon, maturity date, coupon dates and ISIN are fixed instrument data. Yields, net yields and durations are recalculated from the latest price.

Net yield — after-tax yield to maturity

The headline gross yield is the conventional gross redemption yield (yield to maturity), before tax. Our net yield is the internal rate of return (IRR) of the gilt's after-tax cash flows, held to maturity:

• Each semi-annual coupon is taxed at your selected income tax rate (the coupon is savings income).
• The redemption at £100 is left untaxed — the capital gain from a sub-par price up to par is exempt from capital gains tax, because gilts are CGT-exempt.

For gilts with under two years to maturity we use a simple, equivalent approximation: gross − tax × running yield. This is why a low-coupon gilt trading below par shows a higher net yield for higher-rate taxpayers — most of its return is the tax-free pull to par rather than taxable coupon.

Grossed-up yield

The grossed-up yield is the gross yield a fully-taxable investment (a savings account, an at-par bond) would need to pay to match the gilt's net yield, at your tax rate:

It is the fair, like-for-like comparator against a savings rate or deposit.

Accrued interest

When you buy a gilt between coupon dates you also pay the interest that has built up since the last coupon (the difference between the clean price quoted and the dirty price you settle). We calculate accrued interest to a T+1 settlement date on an actual/actual day-count basis — actual days since the last coupon divided by the actual days in the coupon period, in UTC.

Modified duration

Modified duration measures price sensitivity to yields: roughly, the percentage change in price for a 1% change in yield. We use the standard semi-annual formula — Macaulay duration computed on the gross yield to maturity, divided by (1 + y/2):

Longer-dated gilts have higher duration and so larger price swings when interest rates move — the main risk for a gilt held and sold before maturity.

Tax assumptions — read this

We apply current UK tax rules as they affect a private individual holding gilts directly (not through a fund or wrapper):

• Coupon income is taxed at your marginal income tax rate (0%, 20%, 40% or 45%).
• Capital gains are exempt — the gain to maturity, or on any earlier sale, is free of CGT. Equally, a loss on a gilt is not allowable for CGT, so the apparent "loss" on an above-par gilt held to maturity cannot be used against other gains.

Index-linked gilts

For index-linked gilts we show the real yield (the quoted, inflation-adjusted yield) and a nominal equivalent that adds an assumed long-run RPI of 3.5% for rough comparison with conventional gilts. The inflation uplift on the principal is CGT-free; the coupon (including its inflation uplift) is taxable income.