I have just retired and have amassed a pot of approx 100k to supplement my pensions.

As it is the only 100k I have I do not want to lose it, an IFA has recommended an insurance bond with capital protection but when I look at the charges it looks as though everybody is making money but me!

Maybe I am being paranoid and it really is good advice.

Can anybody help me with this?

I wonder how much commission the IFA would make on the bond.
Do you have to put it all in one place?
You could split it up and diversify.
As to where you invest the portions - that's the big question and the answer depends upon your timescale, future plans, attitude to risk etc. Good luck.

I am not against insurance bonds but if I were in your position, I would not put the whole of my 100k into any one product.

I still think there's an element of tunnel-vision here. Say you invest in (amongst others) Dunedin Income Growth IT, you will receive a dividend of 4.7% - not bad - but the trust's share price is currently running at 29.3% growth a year. So you invest for income, but receive a far larger capital gain. The capital gain, depending on your other gains in the tax year, may well be taxed at a lower rate, or be free of tax altogether because it falls within your personal allowance, which is now (I think) £10,680 a year.

What this means is that you may rule out high-performing trusts like Standard Life UK Smaller Companies, which has a dividend of just over 1%, but is currently running at 74.6% growth over a year.

Given those figures, there's no way I'd invest in an insurance bond. Not only do I not trust IFAs, I don't trust insurance companies either. Do your own research (there's piles of free information on the web), grit your teeth and jump. It's a complete illusion that there's anything remotely like a risk-free investment. If you put the £100,000 in the bank you won't beat inflation.

Unless someone has a big cash reserve to tide them over during lean years, they need a reliable source of income that rises every year. A basket of high yield FTSE blue chips is OK, but you will need a reserve. A basket of ITs shouldn't need a reserve as they hold one themselves.

The Motley Fool boards have areas for discussing High Yield Portfolios (HYP) and also baskets of ITs. See luniversals posts and baskets for the latter.

I'd doing a bit of both, but I'm a few years off retirement, so am going for growth shares and ITs rather than income. After retirement, I'll use our CGT allowances to realign everything and "Bed and ISA" at the same time.