UK-based Barclays Wealth is launching a five-year fixed rate bond for investors seeking to lock-in a high level of income with the potential of deferring any payout.

The deposit-based investment, which was launched on Friday last week, offers the choice of an annual income of 4 per cent gross or a payment of 22 per cent at maturity for investors choosing the deferred income option.

The deferred option has gained renewed attention as a way to mitigate, if not entirely avoid, income tax following the UK government’s 22 April budget, in which it created a new, higher income tax band of 50 per cent on incomes of £150,000 ($225,000) and above.

In its product description, Barclays Wealth said income is not dependant on the performance of an index or asset and the bond offers full capital protection at maturity. If the bond is sold before maturity, depositors may get back less than they invested.

Returns are paid gross within a pension arrangement, Barclays Wealth said, adding that the minimum investment is £10,000.

“Investors looking to lock-in a competitive rate of income for five years are not spoilt for choice at the moment, particularly if they would prefer not to put their capital at risk. The Fixed Rate Bond is designed for such an investor and provides additional comfort in the fact that it is backed by Barclays Bank, which is rated AA- by S&P’s. For those who believe base rates – and therefore savings accounts – are unlikely to rise for some time this bond could provide a compelling solution,” said Colin Dickie, director, Barclays Wealth.

Despite the shock to the structured products sector from Lehman  Brothers’ bankruptcy last autumn, these investment vehicles continue to roll out into the market. For example, London-based Meteor Asset Management has launched its latest Prima Growth Plan, PGP 15. The returns are linked to the FTSE 100.

Meanwhile, HSBC Global Markets has launched its Protected FTSE 100 Bonus Plan IV, the fourth in a series of investment products predicated on the growth potential of the 100 largest UK companies by market capitalisation. Natwest International Personal Banking has also recently launched two structured deposit accounts.