AJ Bell launches three new portfolios in Gilt MPS range amid surge in adviser demand

AJ Bell Investments has expanded its Gilt MPS range to include three new portfolios with maturity dates out until 2032, enabling advisers and clients to benefit from an even wider range of maturity options using the Gilt MPS ‘ladder’ approach.

This follows the launch of the popular Gilt MPS 4 portfolio in December last year, which now accounts for around a quarter of all assets under management across the entire Gilt MPS range – highlighting the significant demand for longer maturity Gilt MPS portfolios alongside the existing range of portfolios with maturity dates that start from later this year.

The Gilt MPS purchases gilts below par, meaning most of the return comes from the capital gain at the point of maturity, which is tax-free when using gilts. For example, compared with a fixed rate cash savings account paying 4.1%, an equivalent £100,000 investment could result in an extra £525, or 53 basis points, for higher rate tax paying client portfolios after income tax on savings interest is deducted (see table 2 below).

The AJ Bell Gilt MPS range of new and existing portfolios will also be renamed to reflect their maturity dates, for example ‘Gilt MPS Final Maturity 2027’.

The Gilt MPS range carries a low investment management charge of just 0.10% per annum, and advised clients can invest in the range with as little as £10,000. This means more clients across a broad spectrum of wealth profiles can benefit from the tax planning and investment opportunities currently offered by gilts.

Ryan Hughes, AJ Bell Investments managing director, says:

“Since we launched our Gilt MPS range just under a year ago, we’ve seen a surge in demand from advisers looking for flexible, tax efficient investment solutions to protect client wealth. After seeing significant appetite for the first three portfolios launched as part of the range, our fourth Gilt MPS portfolio released in December last year has already seen considerable inflows. We are therefore meeting that demand directly by launching three new Gilt MPS portfolios to give advisers even more flexibility.

“As we approach the end of the tax year, advisers will be well positioned to support clients looking for alternative ways to protect their wealth while earning a secure return in a highly tax efficient manner, particularly if we continue to see falling interest rates from the Bank of England. Higher and additional rate taxpayers are even better placed when considering the gross equivalent yield versus a cash savings account – something that will become even more prominent when tax on savings interest increases by two percentage points from April 2027.

“By expanding our range of portfolios out to 2032, advisers and their clients will be able to utilise an even wider range of maturity options using the Gilt MPS ‘ladder’ approach. Clients can benefit from a secure and reliable return with a minimum investment value of £10,000, and very low charges at just 0.10% per annum.”

Gilt MPS explained

AJ Bell’s Gilt MPS, designed for advisers and their clients who are looking to invest in a tax efficient MPS, features short-dated gilts issued with a low coupon which trade on discounts to par. 

These low coupon gilts benefit from a large element of their total return coming from capital growth at maturity, which is free from capital gains tax. Only the income element from the interest received will be subject to tax at the client’s marginal rate. Tax treatment depends on individual circumstances and rules may change.

Table 1 – Gilt MPS range:

Portfolio	Number of issues	First maturity date	Final maturity date
Gilt MPS Final Maturity 2027	2	Occurred January 2026	July 2027
Gilt MPS Final Maturity 2028	3	Occurred January 2026	January 2028
Gilt MPS Final Maturity 2029	4	October 2026	January 2029
Gilt MPS Final Maturity 2030	4	July 2027	October 2030
Gilt MPS Final Maturity 2031	4	January 2028	July 2031
Gilt MPS Final Maturity 2032	4	January 2029	July 2032

Source: AJ Bell Investments

The portfolios are designed to be held until maturity to benefit from the ‘pull to par’ and offset fluctuations and interest rate changes.

As each gilt matures, advisers have the option of withdrawing the proceeds, rebalancing within the existing portfolio, or rebalancing into an adjacent portfolio along the maturity ladder. 

Interest payments are made every six months, offering a secure income stream. The Gilt MPS is available in six different maturity preferences, allowing advisers to choose an investment time horizon and gilt maturity dates that suit their clients’ needs.

The tax attraction of the Gilt MPS

Gilts are particularly effective for higher or additional rate taxpayers, as capital returns are free from capital gains tax and short-dated low coupon gilts can offer favourable yields, when considering tax that would be paid from savings interest in a fixed-term cash investment. 

Buying gilts which trade below par, such as those in the Gilt MPS, means returns can be significantly higher than can be earned from traditional fixed rate savings accounts, due to most of the gains being made from the return of capital, which in gilts is tax free.

Table 2 – higher rate taxpayer example:

3.49% yield to maturity	1.25% coupon	1 year fixed rate term 4.10%
Face value	£100,000	£100,000
Buy for (market price)	£97,050	£100,000
Annualised capital gain	£2,235	£0
Income	£1,250	£4,100
Total return	£3,485	£4,100
Income taxed at 40%	-£300	-£1,440
After tax return	£3,185	£2,660
After tax yield	3.19%	2.66%

Source: AJ Bell Investments. Illustrative example, tax equivalent yield on one-year gilt, for a 40% taxpayer considering their £500 tax-free interest allowance. Coupon example based upon annualised return from a UK Treasury 1.25% Gilt 22/07/2027 as at 28/02/2026 and held to maturity. 

Using the above example, an investment in the fixed rate cash account would have to make 5.01% to be equivalent to the return from a gilt, considering the tax paid by a higher rate taxpayer. This is referred to as the ‘tax equivalent’ or ‘pre-tax’ yield.

Table 3 – additional rate taxpayer example:

3.49% yield to maturity	1.25% coupon	1 year fixed rate term 4.10%
Face value	£100,000	£100,000
Buy for (market price)	£97,050	£100,000
Annualised capital gain	£2,235	£0
Income	£1,250	£4,100
Total return	£3,485	£4,100
Income taxed at 45%	-£562.50	-£1,845
After tax return	£2,922.50	£2,255
After tax yield	2.92%	2.26%

Source: AJ Bell Investments. Illustrative example, tax equivalent yield on one-year gilt, for a 45% taxpayer with no tax-free interest allowance. Coupon example based upon annualised return from a UK Treasury 1.25% Gilt 22/07/2027 as at 28/02/2026 and assuming purchased one year from maturity and held to maturity.