Because no-one is sure which way the stock market will jump, and savings are offering low returns, investors are looking ways to beat the market. It is impossible to give any definites, but you should at least be familiar with the options.

We’ve touched on the risky side of investing with spread betting, and now look at some safer options. One of these is a guaranteed income bond (Gib). These are run by life-insurers and not, as with your savings account, by banks or building societies. Interest on Gibs is paid net of basic-rate tax. Non-taxpayers cannot reclaim it.

Ah, that thorny tax problem again. So why not lend some money to the Government – rather than just give it? If this appeals, you are entering the world of gilts. The advantage of this loan is that it pays a fixed income over a fixed period.

Since your gilt in backed by the Government, you will get your cash back when the gilt expires. If you do not get your capital investment returned, the country is in a far greater mess than you feared - anarchy rules, OK!

For instance, if you bought a gilt that guarantees to pay you 5% a year until 2008, you can expect to receive £5 a year. This example is apt because gilts are typically sold in units of £100. At the end of the term, you will get your £100 back.

Income on gilts is taxed, unless bought within an Isa. The other downside is that once purchased gilts are traded on an open market.

Unless you bought your gilt at issue, this may mean you pay more (buy “above par”) or less than the face value to buy your gilt. Price will fluctuate in line with demand.

Already, you can see that there is no easy fix. But you can reduce the risk.

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