Returns on Gilts
Gilts, which are the name for Government bonds issued by the UK Government, pay a rate of return (a rate of interest) which is fixed. Therefore at the time you buy the investment, you will know with certainty what return you are going to receive.
The name of a gilt will give a clue to the rate of return it will pay and the date on which the investor will have the investment redeemed by the issuer.
When the gilt is repaid, 'the redemption date ', the investor will receive £100. Thus, for example, Treasury 8% 2009 means that an investor will be paid 8% per £100 of face value each year and the stock guarantees to repay at par in 2009.