Investment Bonds

These are single lump sum investments. This is a way of investing in funds. In a number of different assets, you choose which suits you best according to the level of risk you wish to take.

They include a small amount of Life cover to qualify as an insurance policy. Profits made within these products are taxed internally at the appropriate Life assurance companies' corporation tax rates. This is approximately equivalent to the tax on saving income that would be paid by a basic rate tax payer.

The Inland Revenue allow a withdrawal of up to 5% of the initial investment to be made during each policy year without any income tax to pay, the policies are tax deferred for 20 years.