HM Treasury. The reduction in the weighted average maturity of gilt issuance reflects reduced investor demand. Photo: whitemay via iStock
Planned issuance of index-linked and long-dated conventional gilts has fallen as pension scheme demand has declined, the government has confirmed.
HM Treasury's Debt Management Report 2026-27 – published alongside the Spring Statement today (3 March) – noted that continuing strong demand for short-dated conventional gilts was anticipated in 2026-27 – saying that planned issuance had increased from 37.1% to 38.6%.
It added it had also increased the planned issuance of medium-dated conventional gilts to 30.9 in 2026-27.
However, it noted market feedback suggested declining demand for long-dated conventional gilts over the medium term, in particular from the domestic pension fund sector.
It said, relative to the 2025-26 programme from Spring Statement 2025, a 4.3 percentage point proportional decrease in the issuance of long-dated conventional gilts is planned in 2026-27 (at 9.1%).
The report said that some market participants had also suggested that pension fund demand for index-linked gilts had also been declining – noting that issuance to index-linked gilts in 2026-27 would be reduced to 9.3% relative to last year.
It said £30.5bn of issuance (12.1% of total issuance) will be initially unallocated in 2026-27 – somewhat higher than announced at last year's Spring Statement (9.2%) as a result of the Debt Management Office wanting to "facilitate the scheduling of gilt tenders in a more programmatic way" and to maintain flexibility.
The report said: "At the annual consultation meetings with the Economic Secretary to the Treasury in January 2026, market feedback noted that the previous year's remit had been well-received by the market, with the reduction in the weighted average maturity of gilt issuance reflecting reduced investor demand, particularly from defined benefit pension schemes, for longer maturities. Attendees expressed support for a similar approach to the issuance split in the 2026-27 financing remit."
The report said that, at the end of September last year, the largest investor groups in gilts were overseas investors (33.4% of total gilt holdings), insurance companies and pension funds (21.1%), and the Bank of England's Asset Purchase Facility (18.5%).
Gilt holdings by sector (% of total market value gilt holdings)
Source: DMO, ONS and Bank of England
