Oil group Enquest prices bond at 5.5pc.

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Enquest (LSE: ENQ.L - news) , the largest independent oil producer in the UK North Sea, is the latest company to turn directly to households for financing, launching a retail bond at 5.5pc.

The Enquest product is one of a line of retail bonds targeting ordinary investors, but experts warned that investing in these products is risky as there is no financial safety net.

Brian Dennehy, of Dennehy Weller, said that retail bonds are not covered by the Financial Services Compensation Scheme (FSCS). "No one should be blase on this point," he said. "Remember just a few years ago there was talk of BP (LSE: BP.L - news) going bust."

He added that 5.5pc would look less attractive in the coming years because there is no inflation protection, and interest rates and inflation may go up sharply.

Investors who buy the bond will get a guaranteed 5.5pc until 2022, unless they choose to sell it on before then. Mr Dennehy warned that you would "almost certainly lose money" if you chose to sell thebond before maturity. "If interest rates go up the capital value of this bond should go down," he said.

Enquest is the first oil company to launch a retail bond. The smallest amount you can invest is £2000, and you can invest from now until February 8. The bond will be traded on the London Stock Exchange (LSE: LSE.L - news) 's order book for retail bonds.

Until recently, bond launches have been reserved for the big institutional investors, with retail investors not being involved. More recently, however, with companies struggling to get bank funding, companies have targeted retail investors instead.

Businesses as diverse as National Grid (LSE: NG.L - news) , Tesco (Other OTC: TSCDY - news) and John Lewis have launched bonds directly to investors in recent months. These are unlike so-called fixed-rate bonds, which are really fixed rate bank accounts and carry the same level of protection as any other savings account.

Retail bonds carry a level of risk, because you are effectively loaning your money to a company and could lose it if that company goes out of business.

Henrietta Podd, of broking and advisory firm Canaccord said that, when you are buying retail bonds, you should look for those issuers who have a simple business model and a good track record through various economic cycles.

"However this company is a complex business, which makes it difficult to assess the risk it poses in the absence of a risk rating. Investors should be aware they will not have protection from the Financial Services Compensation Scheme, in the even of this bond defaulting, and that this is structured subordinate debt, so investors would be behind the banks when it came to any claim on assets."