OPTION 2 offers up to 6.0% annual income and early maturity…
OPTION 1 offers 4.6% unless the FTSE falls 40% or more
This popular plan from Investec offers the potential for a 1.5% payment each quarter, depending on the performance of the FTSE 100 Index. That’s a potential 6.0% income per year.
The Index is measured at the start of the plan, and then again at the end of each quarter. If the Index is above 80% of its starting level (i.e. it can fall nearly 20%), a 1.5% income payment is made. If the Index has fallen by 20% or more, no income payment is made for that quarter.
The plan also offers some capital protection against the UK markets falling since your initial capital is returned in full, unless the Index has fallen by more than 40% at the end of the plan term. If this does occur, your capital is reduced in line with the Index and you could therefore lose some or all of your initial investment.
So if you’re looking for high income opportunities and are confident the UK markets will not fall by 20% or more, this plan is certainly worth reviewing.
This plan also has another option offering 4.6% annual income unless the Index falls by 40% or more.
Important Information: This is a structured investment plan which 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 underlying investment. There is also a risk that the company backing the plan known as the Counterparty may be unable to repay your initial investment and any returns stated.
Potential annual income: 6.0%
Potential to kick out (mature early) yearly from year 2 onwards
Alternative option available paying up to 4.6% each year if the Index doesn’t fall by 40% or more
Capital at risk investment
Available for both 2019/20 and 2020/21 Stocks & Shares ISA, ISA Transfer and Direct Investments. Also available to businesses, charities, trusts and SIPP and SSAS pension schemes
Investment term: Up to 8 Years
Arrangement fee applies
Minimum single investment: £3,000
Maximum ISA investment: £20,000
Maximum investment for ISA transfers and non-ISA investments: £3,000,000
ISA Transfer Applications: 3 April 2020
2019/20 ISA Applications: 3 April 2020
Direct & 2020/21 ISA Applications: 24 April 2020
Reduced arrangement fee: For investments of £100,000 or more into this plan, processed through Fair Investment Company, your arrangement fee will be reduced to 2% of your original investment.