A linker pays a small fixed real yield on a principal that grows with inflation (RPI, aligning with CPIH from 2030). Pick your inflation assumption and see the pounds at maturity.
Return above inflation, held to maturity
Uplifted with inflation, taxable
Same maturity - sets breakeven
Projected value at maturity (after coupon tax)
a net nominal return of a year - a year in real terms
Breakeven inflation:
Estimate only, not investment advice. The actual outcome depends on the inflation path that occurs.
The red line is what your money must become merely to stand still against % inflation. The gap above it is your real return.
at a % real yield over years, before coupon tax:
| Average inflation | Nominal return / year | Value at maturity | Verdict vs breakeven |
|---|---|---|---|
In real terms you keep roughly the same % above inflation in every row - that is the linker's promise. The nominal figure floats; your buying power does not.
| Scenario | Net value at maturity | Net nominal / yr | |
|---|---|---|---|
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