Merchant Investors say bonds are not dead in the water

Figures from Merchant Investors show the combined sales of their investment bond products (the Versatile Investment Portfolio [VIP] and Investment Portfolio [IP]) have increased by 17%, which when the market is seeing a 30% reduction is a great shift. Merchant Investors' VIP sales alone have increased by 47% this last quarter.

Richard Ellis, head of sales and marketing said: "Although the ABI figures showing a 30% drop are not necessarily surprising, given the recent CGT changes introduced by Alistair Darling, we are delighted to see we've been able to buck this trend - and in no small way.

"Bonds are still suitable for many taxpayers and our figures support this continued interest. Looking at higher rate taxpayers, bonds are particularly suitable for those requiring an income-producing portfolio and for trust planning. Bonds also remain a good solution for basic rate taxpayers remaining basic rate or higher rate taxpayers becoming basic rate (or able to assign the policy to a lower rate taxpayer).

"Its important to remember there is no basic ‘one size fits all' solution and this is why our VIP remains so popular with advisers. This bond can provide clients with great flexibility and functionality so even after the CGT changes in the Budget, its still a great product offering great benefits."