# Should you buy government bonds?

> UK investors are buying more government bonds as yields rise, but risks remain.
- Title: Should you buy government bonds? · MoneyWeek | Shortify
- Summary: UK investors are buying more government bonds as yields rise, but risks remain. UK investors are increasing gilt holdings amid rising yields but face…
- Keywords: government bonds, gilts, yield, inflation, interest rate risk, tax strategy, buy, government, bonds, MoneyWeek
- Source: MoneyWeek — https://moneyweek.com/investments/bonds/should-you-buy-government-bonds
- Published: 2026-10-09T08:23:56+00:00
- Read time: 1 min
- Topics: uk, government bonds, gilts, yield, inflation, interest rate risk, tax strategy
## UK investors boost gilt holdings
Hargreaves Lansdown reports a 38% year-on-year rise in users holding individual gilts.
## 30-year gilt yields 5.94%
The 30-year gilt now yields 5.94%, the highest in recent years.
## Capital gains drive returns
A chunk of the 6% return comes as capital gains when the bond redeems at par value.
## Inflation risks remain
Higher interest rates and inflation threaten the real value of fixed income returns.
## Index-linked gilts less effective
Linkers got crushed in 2022 as interest rate hikes outweighed inflation protection.
## Tax strategy benefits short-dated gilts
Short-dated gilts trading at discount offer mostly tax-free yields for higher-rate taxpayers.
## Stocks may offer better value
The FTSE 100's 7.4% earnings yield outstrips gilts, but stocks carry inflation protection.
## Key takeaway

UK investors are increasing gilt holdings amid rising yields but face inflation and interest rate risks.