Product Index Link: N/A

Starting Level Of Index(s): The bond starts on 13 January 2006.

Final Index Level: The bond matures on 13 January 2011.

Inferred Investment Period: 5 years

Actual Investment Period: 5 years 4 weeks

Advertised Growth Rate: Fixed gross annual income of 7.5% or fixed quarterly income of 1.875% with the opportunity to reinvest for growth of 43.5% of the original amount invested over the five year term.

Investment Structure: A sterling denominated Bond listed on the Luxembourg Stock Exchange.

Capital Protection

Capital should be returned in full if the investment is held for to maturity.

Market Protection

100% capital protection if the investment is held to maturity.

Can be held as a Maxi Equity ISA: Yes

Can be held as a Mini Equity ISA: Yes

Can be held as a Mini Cash ISA: No

Can be held as a Direct Investment: No

Can accept PEP/ISA transfers: Yes

Can accept Cash ISA/TOISA transfers: No

Tax treatment if held outside PEP/ISA: Any income received from a direct investment will be paid gross and is subject to income tax at the investor's highest marginal rate. Rates of tax are currently 20% for a basic rate taxpayer and 40% for a higher rate taxpayer.

The following example returns are based on a £10,000 investment Income: Assuming the investment is held until maturity this plan will provide income of £3,750, which together with a return of capital of £10,000 = total return of £13,750.

The money in the Secure Income Bond is invested in a combination of cash and a portfolio of insurance contracts. Income is creatd through interest on the cash and the sale or maturity of the insurance contracts (which are corporate protection policies, for example 'Key Man' insurance).

This is the third tranche of this particular contact, none of which have previously been reviewed on our website as we have to draw some lines as to what we will feature. We usually only review structured investments contracts that are stockmarket linked because there is a clearly defined underlying measurement. We have however had many enquiries about this contract and have therefore decided to publish our opinion. When first launched, the high headline income rate coupled with the lack of stockmarket exposure, at first sight seemed to be the answer to many clients demands for income. However, on closer examination, we felt unable to recommend it. Our view on the contract has not changed since the original one was launched; whilst there is no stockmarket exposure, the risk to capital is not only un-quantifiable but if there was any ultimate loss of capital it would be almost impossible for us to verify the justification for the loss. We hope that the investment "does exactly what it says on the tin" but for the above reasons we feel unable to endorse the proposition.