Onshore Investment Bond Interest Rate Rises Among Advisers and Clients
London, 20th May 2026 – Advisers are increasingly using onshore investment bonds as part of financial planning strategies as interest from clients increases, new research from Chesnara Life (UK) Ltd shows.1
Research for its Onshore Bond Adviser Sentiment Survey found more than a quarter (26%) of advisers said they had significantly increased their use of onshore investment bonds in the previous tax year.
Advisers growing use of onshore bonds is partly in response to rising enquiries from clients – almost nine out of 10 (88%) expect more enquiries from clients about onshore bonds in this year including 28% who expect a significant increase.
Chesnara Life believes the growing interest from advisers and clients is being driven by a combination of factors including the role of onshore investment bonds in estate planning as well as the changing tax treatment of other investments.
Its survey, which investigates the use of onshore investment bonds by advisers as well as their views on key market issues, highlights the growth in the market. All advisers surveyed sold onshore investment bonds.
On average, advisers surveyed wrote £2 million of onshore investment bond business in the last tax year with a minimum case of about £100,000 and an average case size of £265,000. Around one in six (16%) questioned wrote more than £5 million of onshore bonds business.
Advisers are upbeat about the current tax year and onshore investment bond business. On average, they expect to write £2.24 million of business with more than a fifth (21%) expecting to write more than £5 million.
They are similarly optimistic about average case sizes which are expected to rise to £394,000. Around 17% expect an average case size of more than £750,000.
Mark Lambert, Head of onshore bond distribution, Chesnara Life (UK) Ltd, said:
“Advisers are increasingly using onshore investment bonds as part of everyday financial planning conversations and momentum across the market will be further boosted in the current tax year.
“We are seeing growing interest in onshore investment bonds and trusts with estate planning a key influence on demand. Providers need to respond to that with more support for advisers and their clients.”
Onshore bonds offer zero tax on cash dividends at a policyholder level while non-dividend income is taxed at 20%. Capital gains realised within the Bond are subject to UK life fund taxation.
This “fund level” taxation treatment of income and capital gains results in a full basic rate income tax credit being available to the investor when a chargeable event arises. In effect, this means that the policyholder is treated as having already paid basic rate income tax on these gains. Top slicing relief and 5% p.a. tax deferred rules on withdrawals remain. Lifetime transfers by way of assignment without consideration are generally not treated as taxable events.
1.Chesnara Life commissioned independent research company PureProfile to interview 200 UK financial advisers during April 2026.
About Chesnara Life (UK) Ltd
Chesnara Life (UK) Ltd, formerly HSBC Life (UK) Limited, is a UK subsidiary of Chesnara plc. Chesnara Life offers its open architecture Onshore Investment Bond as a stand-alone offering or through a range of third-party investment platform partners. The Chesnara Life Business Development Team supports all versions of our Bond. The Chesnara Life Onshore Investment Bond provides individual investors with access to over 4,800 funds (Investment Trusts, Open Ended Investment Companies, Unit Trusts and Exchange Traded Funds) from more than 200 Fund Managers. chesnaralife.co.uk
Chesnara Life (UK) Ltd is authorised by the Prudential Regulation Authority (“PRA) and regulated by the Financial Conduct Authority (“FCA) and the Prudential Regulation Authority (“PRA”). Our Financial Services Register number is 133435 and our registered office is at: 2nd floor, 33-34 Winckley Square, Preston, Lancashire, PR1 3JJ, United Kingdom. Registered in England number 88695.
Media Contact:
CDR – Jonathan Flint – Jonathan.Flint@cdrconsultancy.com