Government Gilts
Investments
'Gilts' are basically loans made to the government by investors. Gilts make up much of the national debt, and when the government needs to borrow more, they simply issue a new Gilt.
Income from Gilts is derived from interest payments and a final redemption. Interest rates affect the value of a Gilt, with rises causing a fall in the Gilt’s value, and vice versa. Inflation also detracts from the true value of the Gilt’s redemption.
Many professional investment portfolios incorporate Gilts, since they can help to spread risk, as well as providing income.