Investment bonds are investment products, usually with some life insurance attached, that aim to grow your money over time. Find out how they work, and the pros and cons to help you decide if they’re right for you.
What’s in this guide
How do investment bonds work?
Some people save through them to cover care costs, provide a regular income, or leave an inheritance for loved ones.
You give a lump sum of money to a life insurance company. They then invest it for you, usually in a range of funds.
Over time, your money might grow. You might get some back each year, but you usually can’t take out all the money for a while, usually five or ten years.
When you cash it in later, you might have to pay some tax on the money you’ve made. You can find out more about how investment bonds are taxed on the Aviva website.
Investment bonds might be suitable for you if:
- you’re okay with locking your money away for a while and don’t need access to it immediately
- you’re comfortable with taking some risks.
Investment bonds might not be right for you if:
- you can’t afford to risk losing any of your initial investment
- you might need the money back soon, or
- you’re relying solely on them to cover your care expenses.