What are mini-bonds - and after the Providence Financial collapse, are they safe?

High rates of return reflect higher risk of the company collapsing and there is no investor safety net

Tax for cash-in-hand
(Image credit: Getty Images)

Savers on the hunt for income have received a timely lesson in risk this month after two so-called "mini-bonds" launched by Providence Financial have collapsed, potentially losing investors collectively more than £8m.

What has happened?

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