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Abbey National looks high

Graham says: “The strategy is more cautious than some bonds, for example those linking to a basket of currencies.” Rutter says: ” Of the various indices available, the Dow Jones Eurostoxx has become a favourite of late. A more somber choice than some. I feel the five-year term is more suited to these plans.”

Turning to the Isa&#39s disadvantages Rutter and Graham comment on the rate of income. Graham says: “There is no opportunity for capital growth other than the accumulation of interest. The income is lower than the same company&#39s three year product.” Rutter says: “There is no minimum return. The 7 per cent income looks less attractive than some of the, albeit shorter time span, offerings of other providers.”

Lewis says: “The charge of 6.03 per cent, whether implicit or not, for buying shares is quite high.”

Commenting on Abbey National&#39s reputation the panel are positive. Rutter says: “Abbey National is a household name and is becoming known as a player in this particular market.”

Graham reckons it is as good as most and Lewis says: “Abbey National is quite well known in the high street and this helps enhance the product.”

Looking at the Isa&#39s main competition the panel mentions similar products from Scottish Widows and GE Life, the three-year products from Abbey National, and corporate bond offerings from Aberdeen and Hendersons.

Rutter goes on to say: “It has to be said that under its other banners of Scottish Mutual and NDF, Abbey National is covering much of this paticular market.”

Graham thinks the charges are fair and reasonable. Lewis and Rutter feel the charge is quite high. Rutter says: “The initial costs, particularly as described in the literature, look high.” Lewis says: “The charge is quite high. The 1 per cent fall in market level for 1 per cent fall in capital is generally understood and reasonable.”

Examing the product literature the panel is complimentary, Graham says: “It&#39s clear and helpful.” Rutter thinks the literature is straightforward and sufficiently explanatory. He says: “These are not &#39sexy or cool&#39 financial products.” Lewis says: “Easy to read, well set out, no dominating reference to high income as experienced in other literature.”

Lewis goes on to say: “These types of products would be quite good for the retired and elderly clients seeking somewhat higher income. In previous years guaranteed equity bonds, as sold in 1995 and1996 were generally quite successful, although five years can be considered to long a term, I prefer three to four year terms.”

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