I'm planning to retire in 3 years and am building a gilt ladder to cover a few years' expenses in poor markets.
I'm about to buy gilts maturing 2031 and am trying to decide between an ordinary gilt (TG31) gross yield 4.719% and a linker (TR31) real yield 1.238%. Based on BoE forecasts TG31 will return about 2% more in total (not per annum), so that 2% would be the price I'd be paying for insuring against higher than expected inflation if I chose the linker.
Appreciate that MN may not be the right forum for this question but I know that some finance people post on here so grateful for any thoughts. Appreciate that those thoughts are likely to be "who knows, do you feel lucky?" and that all of this is already priced in. Essentially I'm asking how much risk you're happy with in the risk-free part of your portfolio, I suppose.