Index Linked Gilts

 

For the risk averse, if you think that inflation is coming but are nervous of buying equities, maybe index linked gilts are worth considering .   These are government bonds where both the interest and the redemption price  are adjusted for changes in the Retail Price Index.

 

For a detailed description of index linked gilts and how the changes in interest and redemption price are calculated see http://www.dmo.gov.uk/index.aspx?page=Gilts/Indexlinked

 

For a thoughtful article on the subject  see http://www.timesonline.co.uk/tol/money/investment/article5575353.ece