Where will the FTSE be in the future?

“Whether you think the FTSE 100 could go up, down or stay relatively flat in the coming years, there is something to match from the two investments featured below from the Royal Bank of Scotland.

If you think the FTSE may go down, the UK Step Down Defensive Plan will provide 7.5% for each year provided the Index is higher than a particular level at each anniversary. The defensive part of the investment refers to that level falling by 3% each year (down to 85% of its starting value in the final year) so even if the FTSE goes down, the investment could still provide the stated returns.

However, if you are more confident that the FTSE could be at least its starting value or go up in the future, then a higher rate is potentially achievable from the UK Growth Kick Out Plan, offering 9% for each year the investment has been in place.

Conditional capital protection means that your original investment is returned in full unless the FTSE falls by 50% or more during the investment term and is below the starting level at the end of the plan, in which case your initial capital will be reduced by the same amount as the Index.

Both investments can mature as early as year 1, meaning the potential for these competitive returns is yours after only 12 months.”

Oliver Roylance-Smith, head of savings and investments

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This is a structured investment plan that is not capital protected and is not covered by the Financial Services Compensation Scheme (FSCS) for default alone. There is a risk of losing some or all of your initial investment due to the performance of the FTSE 100 Index.

There is a risk that the company backing the plan or any company associated with the plan may be unable to repay your initial investment and any returns stated. In addition, you may not get back the full amount of your initial investment if the plan is not held for the full term. The past performance of the FTSE 100 Index is not a guide to its future performance.

If you are at all unsure of the suitability of this type of investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.