The £16.78 makes it a dirty price, yes. It's still expensive, as indicated by the poor yield you calculated (correctly). Perhaps liquidity is an issue, certainly trade volumes are low. It looks like you happened to pick one of the most illiquid gilts on the market.

Perhaps consider a similar duration but more liquid gilt, such as TG23 (0.75% 22/07/2023) or TN24 (0.125% 31/01/2024).

Part of my thinking here is the dreaded sequence of returns risk, so this is a little bit about risk management

We have used the HL Active Savings product to good effect to ensure we have cash maturing regularly (i..e. staging deposits to mature monthly, not in lumps). But this product is not available in HL SIPP and ISA

So I am finding the idea of having gilts maturing in a similar way to Active Savings quite attractive, particularly in Mrs T's ISA which is by far the larger of her pots. And we are trying to get to a point where our passive income covers our expenses, we are not far off.

However, I do totally agree with Mr Helpful's point but equities are in a different bucket for us and a different consideration.

I'm going to pick this up again next week but I think it has legs

Thanks again all

Harry

Do what works for you personally. Everybody's circumstances differ.

I suspect that the reality of what lies ahead hasn't fully sunk in yet. Many investors are still living in the bull market era. Viewing many shares ( and indirectly) asset prices as cheap or offering a discount.

A famous quote sums on the current mood.

“Bull markets are born on pessimism, grow on scepticism, mature on optimism and die on euphoria.” - Sir John Templeton,

Government Bonds are entering a new era. Higher yields are here to stay. They offer a risk free return in an unstable climate. As a consequence there'll be a period of adjustment while individual company shares are rerated. At the core the financially weak companies will portionately suffer.

Next year investment into Government Bonds will back on the agenda. As sure as night follows day.

Some financial historian posit that the golden time to have bought Gov't debt was 1982 ..........

https://www.multpl.com/10-year-treasury-rate

but 1982 was also the time to have bought Global Stocks .............

https://www.multpl.com/shiller-pe

So much for the supposed -ve correlation of Bonds with Stocks !!!

Regarding the Sequence of Returns Risk, Frank Armstrong tackles the issue head-on in
'The Informed Investor' chapter 18.
Basically two bucket approach .......
+ Adequate Liquid Reserves (e.g. short-term bonds, for 5-7 years of expenses)
+ Global Equities
In bad stock years, living expenses are drawn from the 'safe' bucket.
In good stock years withdrawals are are funded by sales of equities, with the surplus topping up the safe bucket to the desired allocation.

Personally in late retirement, moving monies steadily from Cash (much in broker accounts), plus a smidgen of USD Treasuries and TIPS, into Stocks.
Have been waiting so patiently and so long enough for more reasonable Stock prices (OK maybe not bargain basement yet), so why not begin to build Risk/Riskless up from present circa 40/60 ?
Rather than sit bemused ?

The mention of lower Gilt prices offering more reasonable yields, is one that had also crossed the mind here, but for now concentrating efforts on selected stocks.
My view re Gilts may well swing round to align with yours in due course !!!
But since free monies are ultimately destined for Global Stocks, not spending, (since investment income flow is adequate for our needs), prefer USD Treasuries to sidestep currency risk.

Trust these rambling thoughts make sense.