Gilts - inflation linked Vs nominal check

masonic

I suppose one attraction to conventional gilts would be if you had a fixed liability in the future and wanted to maximise income in the interim while having certainty of the funds to meet it. But for most people the more distant future liabilities are not fixed in price, and typical large ticket financial liabilities do not involve a single bullet repayment. Repayment of an interest only mortgage and purchase of a level annuity are the only examples I can think of off the top of my head. Though I'm not sure holding the former when you have the money to make capital repayments makes much sense.