Gilt edged security

Government stock, or gilts as they are better known, are effectively bonds issued by the UK Government and are listed on the London Stock Exchange. The term 'gilt' or 'gilt-edged security' refers to the main characteristic of these bonds as an investment, i.e. their security. As the UK Government has never failed to make the interest or principal payments on gilts as they fall due, they are viewed as a safe and low risk investment. The gilt market consists of broadly two different types of securities, namely conventional gilts and index-linked gilts. Conventional gilts form the largest pa...