Bonds boost for savers

AS BRITAIN'S government bond yields spike, savers are getting higher income from gilts, corporate bonds, savings accounts and annuities.

- Harvey Jones

Investment platform Hargreaves Lansdown reports a dramatic 33% jump in demand for gilts in December, which may continue this month.

Hal Cook, senior investment analyst at Hargreaves Lansdown, attributes the sales spike to rising yields. "Five-year gilt yields have climbed from 4.05% at the start of December to around 4.6% today."

Yields could climb even higher if the current bond market crisis intensifies, giving savers an even better return on their money.

As well as the yield, gilts offer the potential for capital growth too. Better still, there is no capital gains tax (CGT) to pay if they do.

Gilts, short for gilt-edged securities, are bonds issued by HM Treasury to fund government spending.