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Rate rise cost

What does a 1% rate rise cost me?

The fall in pounds if yields rise ½, 1 or 2 points — and the gain if they fall — for a gilt from the register or a bond fund by its duration.

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What you enter: what are you holding? · which gilt · amount held.

Worked example

What does a 1% rate rise cost me — an example

Inputs
What are you holding?
A gilt from the register
Which gilt
0 3/8% Treasury Gilt 2026 · duration 0.0
Amount held
£10,000
Result
If yields rise 1 point, £10,000 in this gilt falls by about
£758
If yields fall 1 point, it gains about
£758
As a share of the holding
7.6% per point
Gilt: 4 7/8% Treasury Gilt 2036
duration 7.6 · yield 5.34% · matures 2036-07
Yields move by½ point1 point2 points
Rise: value falls−£379−£758−£1,516
Fall: value rises+£379+£758+£1,516

Held to maturity the gilt still repays £100 whatever the price did in between; the fall only matters if you sell early. Duration only, first-order: for a 2-point move the true fall is a little smaller and the true gain a little larger (convexity). Figures off the Bank of England curves of 2026-10-13.

What duration meansEvery gilt, with its duration

Show the workings
  1. Modified duration 7.58 means the price moves about 7.58% for each 1-point move in yields, the other way.
  2. 0.5 points: £10,000 × 7.58 × 0.5% = £379 — lost if yields rise, gained if they fall.
  3. 1 point: £10,000 × 7.58 × 1% = £758 — lost if yields rise, gained if they fall.
  4. 2 points: £10,000 × 7.58 × 2% = £1,516 — lost if yields rise, gained if they fall.
  5. Duration for 4 7/8% Treasury Gilt 2036: the money-weighted average time to its coupons and its £100 (7.78 years) divided by (1 + 5.34%/2) = 7.58.

How it is worked out. Fall in £ = amount × modified duration × the move in yields (in points) ÷ 100, the standard first-order estimate; the gain for the same fall in yields is the same size. A gilt's duration is computed from its coupons and maturity at today's curve; a fund's comes from its factsheet.

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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.