An investment bond gives you the potential for medium to long-term growth on your money, so over 5-10 years or more, along with fund management expertise.
You also get access to a mixture of funds, which are looked after by professional investment managers. Your premium is invested on your behalf for potential capital growth, which should build up until you withdraw money from your policy.
Of course like any investment, their value can go down as well as up and you may not get back what you put in.
Investment bonds are usually classed as a single premium ‘life insurance’ policy because a portion of your ‘life insurance’ policy can be paid out upon death, but they are really an investment product.
UK Investment Bonds are non-income producing investments and so have a different tax treatment from other UK based investments. This can provide valuable tax planning opportunities for individuals.
You are also able to invest in Offshore Investment Bonds.
You can withdraw up to 5% per year of the amount invested without paying any immediate tax.
It is also possible to utilise investment bonds with Trusts to mitigate Inheritance Tax liability
Further detail can be provided on request.