Educational simulator
What does a retirement income cost in gilts?
Choose an income and a horizon. The simulator prices each future payment on the UK index-linked gilt curve and shows how the income can be secured progressively, contribution by contribution.
Illustration only. This tool explains a concept under development. It is not a product, a quote, a forecast or advice. Results rely on market data at a fixed date and on simplifying assumptions listed below.
Annual income
Cost if bought today
Monthly saving needed
Stress test
What happens if real interest rates move?
Move the slider to shift the whole real yield curve. Compare a pot invested in the Retirement Bond with the same amount held in cash.
Cash pot
Value in pounds
Income it can buy
Retirement Bond
Value in pounds
Income it delivers
Immediate repricing of the holding needed for the income above, using the same curve shifted in parallel. In practice, curve moves are not parallel, and replication with a finite set of gilts is not perfect.
How it is calculated
Assumptions
- Market data. Real yield curve (Nelson–Siegel, continuous compounding) fitted to the yields of the 34 UK index-linked gilts on 5 November 2026. Fixed-increase incomes use the nominal curve: real curve plus Bank of England implied inflation.
- Payments. Income is paid monthly. Inflation-linked amounts are in today’s money. Fixed-increase amounts are in pounds of the first year of retirement, rising by 3.3% each year.
- Building up. Each monthly saving buys future income at the price implied by today’s curve. Savings are assumed to start now and stop when income starts.
- Not included. Fees, taxes and tax relief, employer contributions, transaction costs, replication error and changes in the curve over time.
- Beyond 2073. The longest index-linked gilt matures in 2073. Payments after that date are priced on the model’s extrapolation, which adds uncertainty for younger savers.
- Longevity. The income stops at the end of the chosen horizon. It is not a lifetime annuity.