One gilt maturing each year for N years, priced off today's yield curve, with what it returns after tax and the savings rate that would match it.
What you enter: years to cover · amount needed each year · held in · your tax rate on interest % · coupon %.
| Year | Yield | Cost today | After tax | Savings to match |
|---|---|---|---|---|
| 1 | 4.47% | £28,701 | 4.07% | 6.79% |
| 2 | 4.71% | £27,328 | 4.31% | 7.19% |
| 3 | 4.82% | £25,997 | 4.42% | 7.37% |
| 4 | 4.90% | £24,708 | 4.50% | 7.50% |
| 5 | 4.97% | £23,449 | 4.57% | 7.62% |
How it is worked out. How one gilt works: a gilt is a loan to the government — pay a price today, get a small fixed interest (the coupon) each year and exactly £100 back on a fixed date (maturity). One with a 0.5% coupon repaying £100 in five years costs about £82.40 when yields are 4.5%: the 50p a year plus the £17.60 gain at the end work out at 4.5% a year — the yield. The ladder is one such gilt maturing in each year you need money, priced at the Bank of England par yield for that year. Gains on gilts are exempt from capital gains tax, so outside a pension or ISA only the small coupon is taxed; a savings account would need (after-tax yield) ÷ (1 − tax rate) to match.
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.