Jonathan Davis replies: Firstly, you should ask your teachers’ pension scheme if you can buy an ‘added years’ entitlement. If so, that could be your best bet as it is fully tax relievable and quite secure.

I would have thought that capital preservation is equally important to you as income. Thus, I would be inclined to suggest that you look at investment trusts and open-ended investment companies (OEICs) that aim for absolute returns, for example the multi-award-winning British Empire Securities and Trust Plc (www.british-empire.co.uk/ 0845 850 0181).

Alternatively, iimia MitonOptimal’s Arcturus fund is an OEIC from an award-winning investment house (www.mitonoptimal.com/ 01189 528900). Both funds will alter investments to suit investment conditions. Also look at Octopus’s Protected Venture Capital Trust, which gives 30 per cent tax relief and should provide a growing income (www.octopusinvestments.com/ 0800 294 6821).

My general advice for your portfolio would be not to follow trends. As the late and legendary investor Sir James Goldsmith said: ‘If you can see a bandwagon, it’s too late.’ The following have had great runs for many years: equities, bonds and commercial and residential property. Thus, for income you may only be left with cash in the short term until a pullback comes in those other asset classes, as is currently the case with property, giving you an opportunity to invest.