Are you getting at least 7.25% from your investments? If you have a managed fund or a mixture of equities it is highly unlikely, so the latest version of Investec’s Bonus Income Plan certainly demands a closer look.

The plan pays a fixed income of 7.25% each year whatever happens to the FTSE, with an additional bonus of 0.5% for each year the FTSE is higher at the end of the year compared to its value at the start of the investment. The income you receive outside of an ISA is also not subject to income tax each year, but rather any returns on top of your original investment will be treated as capital gains at the end of term.

Your capital is at risk if the FTSE falls below 50% of its starting level during the investment and also remains below the starting value at the end of the 5 year term – a fair trade off for such an attractive income with the potential for up to 7.75% each year.”

Oliver Roylance-Smith, head of investments and savings

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This is a structured investment plan that is not capital protected and is not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment due to the performance of the FTSE 100 Index.

There is a risk that the company backing the plan or any company associated with the plan may be unable to repay your initial investment and any returns stated. In addition, you may not get back the full amount of your initial investment if the plan is not held for the full term. The past performance of the FTSE 100 Index is not a guide to its future performance.

If you are at all unsure of the suitability of this type of investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.