With food prices up more than 25 per cent in the past three years, energy bills soaring and tax hikes on the horizon, the chance to bag some extra income has rarely seemed more attractive.
Bonds can do just that, and bonds issued for charities have an added bonus – helping donors to feel good and do good.
Alnwick Garden Trust was recommended by Midas five years ago when the Northumbria-based charity launched a bond offering 5 per cent interest. Canny savers who invested £1,000 back then will be £500 better off today, with more cash heading their way.
New investors can benefit from these charity bonds too. They are traded on the London Stock Exchange and offer generous interest payments over a set number of years, generally between five and ten.
‘Bonds can help you bag some extra income, and bonds issued for charities have an added bonus – helping donors to feel good and do good,’ writes Joanne Hart
They are managed by specialist financial firm, Allia, which is run by veterans of the bond market, Adrian Bell and Henrietta Podd. They receive regular approaches from charities wanting to borrow money, but Bell and Podd are extremely choosy about those they take on, turning down more applicants than they accept.
Today, there are ten bonds on offer, with an 11th launched just last week for specialist residential care group, Belong.
Belong
The Chester postcode area, affluent and picturesque, has a population of almost 700,000 – and 15 per cent of them are over the age of 70.
Belong Chester is a self-styled ‘village’ in the heart of the city, offering residential care and independent living to senior citizens, alongside a nursery for toddlers and community spaces.
It is one of eight similar villages across the North West, in Atherton, Crewe, Macclesfield, Didsbury, Newcastle-under-Lyme, Warrington and Wigan, owned and managed by Belong Limited, a charitable enterprise based in Nantwich, Cheshire. Another site will open next year and chief executive Martin Rix hopes to open a tenth in the next few years.
Belong Chester is a self-styled ‘village’ in the heart of the city, offering residential care and independent living to senior citizens, alongside a nursery for toddlers and community spaces
The group has just launched a five-year bond, offering 7.5 per cent interest, payable twice annually. The bonds are at a discount, so investors buying £500 worth will pay only £490 and receive the full amount on maturity in 2030.
The cash will be used in part to repay a bond issue which falls due next year. But surplus funds will go towards the Belong portfolio, ensuring existing villages offer tip-top facilities and sizing up expansion possibilities.
Many senior care homes are accused of taking an institutional approach to residents. Homes are large, staff are under pressure and families worry about how their loved ones are treated.
Belong strives to be different. Each village includes six houses, each featuring 12 ensuite bedrooms, a communal kitchen and living space. Residents are encouraged to help with meal preparation when they can, and to eat together in small groups.
Villages also include independent living flats for those who need partial support, as well as gyms, beauty salons, restaurants, gardens and event spaces.
The concept has been honed and refined over more than three decades – and it works. Occupancy is above 95 per cent across Belong’s eight villages, ratings are high and accommodation is in demand.
Around two-thirds of residents are privately funded, with the rest supported either by local authorities or the NHS.
Belong is a charity so all profits are ploughed back into the villages, but turnover has almost doubled to £51 million between 2019 and 2024, and the balance sheet is strong. Further growth is likely. The number of over-85s in the UK is forecast to rise from around 1.7 million now to 2.6 million by 2036, yet decent residential care is in limited supply.
The bonds will be available to new investors,through Hargreaves Lansdown AJ Bell and Interactive Investor, wealth managers and stockbrokers. The minimum subscription is £500, rising in multiples of £100.
Fixed-interest bonds offer an element of security in a volatile world, and Belong has past experience and future demographics on its side.
The UK is growing older, demand for care is rising and Belong villages offer a livelier and more uplifting approach to residential care. A rewarding investment.
Traded on: London Stock Exchange ORB
Ticker: BEL2
Contact: belong.org.uk
Royal Masonic Benevolent Institution Care Company (RMBI)
Freemasons can be the object of suspicion, but there is no doubting their charitable fervour. The Masonic Charitable Foundation is one of the UK’s largest charities, and a key subsidiary is the Royal Masonic Benevolent Institution Care Company (RMBI).
Originally founded to help freemasons and their families, RMBI now owns 17 care homes across the country, supporting more than 1,000 residents, many of whom have no links to the Masonic order.
Freemasons can be the object of suspicion, but there is no doubting their charitable fervour. Pictured: The Masonic square and compass
RMBI homes are well regarded, but elderly care is increasingly complex and outgoing MD Mark Lloyd was keen to upgrade the estate with new and improved facilities. In 2023, the group launched a £20 million bond paying juicy annual interest of 6.25 per cent and maturing in 2029. Midas recommended the deal and investors have done well.
Traded on the London Stock Exchange, the bonds were priced at £100 each but have since risen to just over £101.
Investors will enjoy generous annual interest payments and know that their investments are being put to good use.
Refurbishments are already under way, new kit has been installed and more improvements are scheduled down the track. A worthwhile investment.
Traded on: London Stock Exchange ORB
Ticker: RMBI
Contact: rmbi.org.uk
Alnwick Garden Trust
The Duchess of Northumberland in Alnwick Garden, which boasts a bamboo labyrinth, a poison garden, a treehouse restaurant and the largest collection of European plants in Britain
Cherry blossom is one of the biggest tourist attractions in Japan, luring millions of visitors each year.
British travellers could save themselves time and expense by heading up to Alnwick Garden instead, which is home to the largest Japanese cherry orchard in the world.
Created by the Duchess of Northumberland at the turn of the century, Alnwick Garden also boasts a bamboo labyrinth, a poison garden, a treehouse restaurant and the largest collection of European plants in Britain.
In 2003, Alnwick Garden Trust became a charity to ensure it worked for the benefit of the North East, and, in 2020, chief executive Mark Brassell issued a ten-year bond to finance construction of the world’s largest play structure, Lilidorei. Bonds were issued at £100 but now trade at £96.70.
They will be repaid in full so original bondholders will not be affected, but investors who buy today will receive £3.30 more per bond when the debt is repaid in 2030. They will also benefit from 5 per cent interest – comfortably ahead of most savings accounts.
Brassell has already put the bond cash to work and Lilidorei is now in full swing. Designed as a magical village, the site welcomed 180,000 visitors last year alone. Bond investors can take a trip to Alnwick and see for themselves.
Traded on: London Stock Exchange ORB
Ticker: AGT1
Contact: alnwickgarden.com
