The two gilts nearest your holding period, and which pays more per £10,000 at your own inflation guess — with the breakeven the market is pricing and the crossover after tax.
What you enter: years you would hold it · your guess for average inflation % a year over that time · your tax rate on interest · held in an isa or sipp (no tax).
Worked example
Conventional or index-linked — an example
Inputs
Years you would hold it
10
Your guess for average inflation % a year over that time
3%
Your tax rate on interest
40% higher rate
Held in an ISA or SIPP (no tax)
No
Result
At your inflation guess of 3%, over 10 years the index-linked gilt pays about
£2,486 more per £10,000
Breakeven inflation the market is pricing for this pair
3.30%
Your guess against it
0.3 points below
After tax at 40%, the conventional keeps · the index-linked keeps
3.30% · 1.97% real
After tax, index-linked wins if inflation averages above
1.32%
Conventional picked: 4 7/8% Treasury Gilt 2036
5.34% yield · matures 2036-07
Index-linked picked: 0 1/8% Index-linked Treasury Gilt 2036
2.03% real · matures 2036-11
Inflation averages
1%
2%
3%
4%
5%
Index-linked pays, per £10,000
−£426
+£966
+£2,486
+£4,146
+£5,955
Indicative, priced off the Bank of England curves of 2026-10-13 (register 2026-10-13); each gilt's yield to its own maturity is applied over your 10 years. 0 1/8% Index-linked Treasury Gilt 2036 matures after February 2030, when the RPI is aligned with CPIH, so from then its uplift follows CPIH — typically a little lower than RPI has been. Information, not a recommendation.
Conventional: 4 7/8% Treasury Gilt 2036, matures 2036-07, yield 5.34% (semi-annual convention) = 5.41% a year effective; after tax at 40% on the coupons (the gain to £100 is exempt) 3.30% = 3.33% effective.
Index-linked: 0 1/8% Index-linked Treasury Gilt 2036, matures 2036-11, real yield 2.03% = 2.04% a year above inflation; after tax 1.97% real = 1.98%.
Breakeven the market is pricing for this pair: (1 + 5.41%) ÷ (1 + 2.04%) − 1 = 3.30% RPI inflation a year. Your guess of 3% is 0.30 points below it.
£10,000 in the conventional grows at 3.33% for 10 years: £13,871. £10,000 in the index-linked grows at (1 + 1.98%) × (1 + 3%) − 1 = 5.04%: £16,357. Difference £2,486 in the index-linked gilt's favour.
Crossover: the two come out equal when inflation averages (1 + 3.33%) ÷ (1 + 1.98%) − 1 = 1.32% — below the market breakeven because tax bites harder on the index-linked gilt.
How it is worked out. The conventional and index-linked gilts nearest your holding period are taken from the daily gilt table (priced off the Bank of England nominal and real curves). £10,000 in the conventional compounds at its yield after tax on the coupons; £10,000 in the index-linked compounds at its real yield after tax plus your inflation guess. The market breakeven is (1 + nominal) ÷ (1 + real) − 1 on the gross yields; the crossover is the same on the after-tax yields.
Not advice. Money Horizon is a planning indicator built on simplified rules. It does not know your full circumstances, cannot replace a regulated adviser, and its figures should not be relied on for any decision. It is not financial advice. Nothing you enter leaves your browser. Calculators use the 2026-27 rules; figures are estimates.