Distribution bonds tend to have a higher amount invested in UK equities than other types of bonds, so they may be riskier. Nevertheless, distribution bonds normally have a strong income flow to them from reliable investments to increase their security. A larger exposure to equities as part of their overall investment mix provides the potential for longer-term growth.

Depending on the performance, the income produced from distribution bonds will fluctuate, and, for tax purposes, withdrawals can be deferred for up to 20 years.