Six things you should know about bonds

With inflation so high, it's difficult to protect the value of your money. One solution is to buy inflation-linked corporate bonds. But before you do, Tim Bennett explains six things you need to know.

If you're trying to protect your money from the ravages of inflation, you're probably feeling a bit desperate by now. With British inflation at 5.2% (according to the retail price index, or RPI), a 40% taxpayer needs to get 8.7% just to stand still. No savings account will pay you that kind of rate, and the government-backed National Savings & Investment bank has just withdrawn its RPI-linked savings certificates. So where can you go?

If you're willing to risk your capital, but aren't keen to invest in stocks, you might be tempted by some recent corporate bond issues aimed at the retail investor. Utilities giant National Grid (NG) has just launched its first inflation-linked bond, joining a growing queue of issuers that includes Tesco, HSBC, Caxton FX and Hotel Chocolat. There's plenty to like about these bonds, but if you are new to the sector, here are six things you need to understand before you take the plunge.

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.