Stock and bond investment

If you are looking at investing money into a bond or another type of investment vehicle then talk first to one of our qualified investment advisers who will be pleased to talk through what options are available without any obligation. Our highly experienced investment advisers can show you growth projections as well as outlining what risk potential there is linked to whatever product you are considering.

An investment bond is a single premium investment contract issued by a life insurance company. Investment bonds include an element of life insurance. The life cover amount is usually only nominal.
Investment Bonds are collective investments in which the investments of many individual investors are pooled. This pooling enables investors to benefit from the economies of scale made available to institutional fund managers. By investing this way hopefully you will get back more than the interest you would earn on a bank or building society account.

The bond itself is just a framework. Your money is actually invested in a wide choice of managed, general and specialist funds offering investment opportunities in equity, property and fixed interest securities.

We have access to hundreds of investment products in the UK

By pooling all the money together, the fund managers can invest in a much larger spread of investments than you could buy yourself. And, by spreading investments, you are also spreading risk - where one type of investment might be hit by a run of poor performance, another could see its value soar. Bonds enjoy the facility to switch between these internal insurance company funds if desired.
Although classed as single premium investments, 'top up' facilities are offered, allowing further amounts to be invested either on a regular or ad hoc basis.

There are a few different types of bonds available:

With Profits Bonds

With-Profit Bonds provide a less volatile investment link with some element of guaranteed growth. By investing in safer things like property, cash and fixed interest securities they can maximise their returns. Some With Profit bonds enjoy a switch facility, other’s are not ‘switch able’ to other funds. It is important to decide at outset whether such a feature is of importance, as it affects the choice of product provider.

Unit Link Bonds

A unit linked bond is a lump sum investment plan that gives you access to various investment markets throughout the world, via a wide range of professionally managed funds. These funds have varying objectives and levels of risk.
The underlying make up of the unit linked bond depends on its investment objectives. This determines the type of stocks and shares in which it invests. Each Investment Linked Bond offers the option to invest for growth, income or both, you can select the option which best matches your own needs.

Distribution Bonds

Distribution Bonds are designed to provide a stable and regular income. Distribution bonds pay a monthly, quarterly or half yearly or annual distribution of any income earned. They invest in a combination of house-hold name company shares and government stock, particularly index linked gilts, which guarantee a return above the rate of inflation.

Frequently asked questions on investment bonds
Q. What returns will I get for my investment?
A. This will depend on:-

The type of bond you invest in

How long you invest for

Any charges that apply

Any withdrawals you make

The performance of the funds

Q. Where is my money invested?
A. You choose where your money is invested. You may want to invest in a number of different funds at any time, to spread the riskEach fund is professionally managed on your behalf. Each fund is divided into units and your money buys units in the fund you choose. The price of these units depends on the value of the underlying investments within that fund. If the unit price goes up or down, so will the value of your bond. Most bonds do allow you to change your choice of funds.

Q. What about tax?
A. Income and capital gains tax is paid by the insurance company within the funds. Under current legislation, you will not be liable to basic rate income tax or to capital gains tax on your bond. When you cash in some or all of your bond, you may be liable to higher rate tax and if you receive age-related allowance the amount of allowance could change.

Q. What happens to my bond if I die?
A. If your bond is in your name only, this will end if you die. A lump sum is then payable the amount depending on the value of your units. You can set the Bond up on two lives, so that it can continue after the first death. You can set your Bond up under trust; payment on death would then be made to the trustees.

Q. How long must I keep my bond?
A. With investment bonds you should be prepared to invest your capital over a period of at least five years. There is usually no restriction on how long you can invest beyond this.

It is therefore apparent that not all Investment Bonds are the same. With this in mind, expert advice and guidance is strongly recommended. Please complete our online enquiry form or request a call back and our independent investment specialist will contact you to discuss you individual circumstances. We will source the whole market to provide you with the most cost effective and appropriate plan to suit you.

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