The bonds issued by Government to raise funds are called Gilts. Since they are issued by Government hence they are considered to be low risk investments. Gilts are normally linked to the bonds specifically UK Government release but the term can be used and known in general. But until unless specified Gilts refer to UK Government bonds.
Gilts normally have maturity period as follows:
– 0 to 7 years and are called short term bonds
– 7 to 15 years and are called medium term bonds
– 15 plus and are called long term bonds
Mainly there are two times of gilt bonds offered
• Conventional Gilts
• Index Linked Gilts