Government bonds from the world's most creditworthy sovereigns have traditionally been considered the safest investments available. In 2026, they're also among the most interesting — UK Gilts and US Treasury Bills offer yields between 4.25% and 4.40%, comfortably above most European bank deposits while maintaining the safety of sovereign backing.
For European investors, accessing these instruments has never been easier. Multiple regulated brokers now allow EU residents to invest in UK and US government debt directly or through ETFs. This guide explains what you're actually buying, what the yields look like, and how to get exposure as a European investor.
UK Government Bonds: Gilts
UK government bonds are called Gilts — short for "gilt-edged securities," a term that dates to when physical certificates had gilded edges. They're issued by HM Treasury and represent the UK government's promise to pay the holder a fixed interest rate (the "coupon") until maturity, plus the face value at maturity.
Current UK Gilt Yields (2026)
Gilt yields in 2026 reflect the Bank of England's sustained rate cycle:
- UK Treasury Bills (3-month): ~4.40% — short-term, high liquidity
- UK Gilts 10-year: ~4.40% — benchmark long-term rate
- UK Gilts 2-year: ~4.20% — medium-term
The yield curve has been relatively flat, meaning you're not giving up much yield to stay shorter-term — a generally sensible choice for most non-institutional investors given the interest rate uncertainty.
UK Gilt Safety
UK Gilts are obligations of the UK sovereign government. The UK has never defaulted on its government debt in modern history. The main risks are:
- Interest rate risk: If rates rise after you purchase a gilt, the market value of your holding falls (though if you hold to maturity, you receive the full face value)
- Currency risk: Gilts are denominated in GBP. For EUR-based investors, GBP/EUR movements affect your total return
- Inflation risk: Fixed-coupon bonds lose real value if inflation exceeds the coupon rate
US Government Securities: Treasury Bills and Bonds
US government debt is among the most liquid and widely held financial instruments in the world. The US Treasury market — roughly $25 trillion outstanding — is the global benchmark for risk-free rates. US Treasuries are held as reserves by central banks globally and back trillions in derivative contracts.
Types of US Treasury Securities
- Treasury Bills (T-Bills): Maturities from 4 weeks to 52 weeks. Sold at a discount; no coupon. Current 3-month T-Bill yield: ~4.25%
- Treasury Notes: 2 to 10-year maturities. Pay semi-annual coupons. 10-year Note: ~4.30%
- Treasury Bonds: 20–30 year maturities. Highest duration risk but maximum yield certainty if held to maturity
- TIPS (Inflation-Protected): Principal adjusts with CPI — appropriate if you expect sustained inflation
US Treasury Safety
US Treasuries are backed by the "full faith and credit" of the US government, which controls the world's reserve currency. The US has never defaulted in modern history. In practice, US Treasuries remain the global risk-free benchmark used by regulators, central banks, and financial institutions worldwide.
Currency risk applies for non-USD investors: USD/EUR fluctuations affect total EUR-equivalent returns.
How European Investors Can Access UK and US Government Bonds
Option 1: Government Bond ETFs (Recommended for Most Investors)
The easiest, most liquid approach for retail investors is through UCITS ETFs that hold baskets of government bonds:
- Available on all major European brokerage platforms (Freedom24, Interactive Brokers, Scalable Capital)
- Can be traded in EUR even though underlying bonds are in GBP/USD
- Diversified across multiple maturities — no individual bond selection needed
- Low cost: TERs typically 0.05–0.20%
Popular options: iShares US Treasury Bond UCITS ETF, iShares Core UK Gilts UCITS ETF, Vanguard USD Treasury Bond UCITS ETF — all listed on Euronext or Xetra.
Option 2: Direct Purchase Through a Broker
Investors who want direct bond exposure can purchase individual Gilts or T-Bills through brokers with direct market access. Interactive Brokers and Freedom24 allow EU residents to buy US Treasury Bills directly. Minimum investments are generally accessible ($1,000–$10,000).
Option 3: EUR-Denominated Alternatives
For investors who want comparable yields without currency risk, EUR-denominated fixed-term deposits through Raisin, Spanish Letras del Tesoro, or quality EU government bond ETFs can achieve 2.5–3.5% with no exchange rate complexity.
Tax Treatment for EU Investors
- UK Gilts: No UK withholding tax for non-UK residents — declare interest in your home country
- US Treasuries: No US withholding tax on interest to non-resident aliens (unlike dividends) — taxed in your country of residence
- Capital gains: Selling before maturity at a profit is typically taxable as capital income in your country
UK Gilts vs US Treasuries vs European Government Bonds
| Bond | 10Y Yield | Currency | S&P Rating |
|---|---|---|---|
| US Treasury | 4.30% | USD | AA+ |
| UK Gilt | 4.40% | GBP | AA |
| German Bund | 2.50% | EUR | AAA |
| Spain 10Y | 3.27% | EUR | A |
| Italy 10Y | 3.50% | EUR | BBB |
For EUR-based investors, UK Gilts and US Treasuries pay roughly double the German Bund. The premium reflects the higher base rate environment and the currency risk you accept. For pure EUR savers, European alternatives avoid exchange rate complexity at the cost of lower nominal yield.
Conclusion
UK Gilts and US Treasuries are genuinely attractive in 2026 for investors who want government-backed safety at yields significantly above European equivalents. The easiest access for EU residents is through UCITS bond ETFs. Direct purchase is possible but requires a broker with direct market access.
Compare government bond yields from 15 countries alongside bank deposits, crypto yields, and crowdlending at APYData's government bonds comparator.