The income yield is 5.35%, the gross redemption yield is 5.42% but we will not dwell on that for long as the redemption date is 2056. Next income payment date 31 Jan.

If you have twenty years to retirement you will receive all you capital back as income. If you have thirty years to retirement you will achieve the holy grail of investing in that for ten years you will have in your Snowball a position that pays you income at zero, zilch, nothing cost.

Now 5.35% isn’t 7%, so you could pair trade it with a higher yielder.

If not, as you re-invest the income the blended yield will grow to above 7%.

On a 10k investment, after twenty years you will receive income of £535.00

The income re-invested at 7% would produce income of £700.00.

A blended yield of 12.35%

If you are lucky enough to have thirty years to invest, you can work out the return you will receive in the last ten years. Also if/when interest rates rise again you may be able to re-invest your income back into the gilt at a better rate. Income is taxable, so best if held in a tax free wrapper.

You have to allow for inflation and also that you could/will make a capital loss until the maturity date.