Investment bond boom to continue, experts predict

Wed, 31 May 2006

Rising property prices and demographic changes will see investor interest in the bond market grow, according to Defaqto.

In 2005 there was an 18.5 per cent increase in sales of onshore bonds and Defaqto expect this trend to continue for the "foreseeable future".

The company states the greater need for estate and inheritance planning brought about by rising house prices and the Treasury's plan to extend inheritance tax to certain types of trust as a driving factor in the growth of onshore bonds .

An expected increase in UK citizens migrating abroad means that investment in offshore bonds should increase too, as their international portability may appeal to Britons living overseas.

Fraser Donaldson, head of investment at Defaqto, commented: "Bonds offer so many advantages in financial planning that I am not surprised that the market is powering ahead.

"Rising property values mean that estate planning is no longer a problem just for the very wealthy … bonds are just one of the options.

"Offshore bonds sales are growing faster … they are a particularly useful vehicle to help mitigate tax for those planning to spend some or all of their time living outside the UK."

Defaqto is an independent product research business, their database offers information on mortgages, savings, loans and credit cards, life, pensions, healthcare, investments, offshore and general insurance products.

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