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Abbey National pins safety on growth

Abbey National has introduced safety plus growth issue 6, a guaranteed equity bond that is linked to the FTSE 100 index over a five-year term.

The product guarantees the return of the original capital plus a minimum of 20 per cent growth. The maximum potential growth is 60 per cent at the end of the term. The average level of the FTSE 100 index is recorded for each six-month period during the term. The growth for each period is capped at 6 per cent, so any increase in the index above this is not passed on to investors. These six-monthly averages are then added together to produce the final return.

Skipton Building Society&#39s five-year guaranteed growth bond is a similar product that also tracks the FTSE 100 for five years. Like the Abbey National bond, the Skipton product guarantees the return of the original capital and a minimum amount on top, whatever happens. The minimum amount is 22 per cent, which is slightly higher than the Abbey National bond. The Skipton product also has a higher maximum growth of 70 per cent. But it is linked to three indices — the FTSE 100, S&P 500 and Eurostoxx 50 and depends on all the indices rising each year to get the maximum return.

Diversifying across global stockmarkets may reduce the risk of relying on one region to perform well, so in this respect the Skipton product is preferable. However, the UK is looking good compared to other regions and diversifying may not take full advantage of the growth potential in the FTSE 100 index.


GE scraps National Mutual in move into over-50s market

The National Mutual brand is to disappear following its takeover by GE Capital, with a new GE Life business being created for the advice-led over-50s market.The new enlarged GE Life will be launched at the beginning of April and it will be offering NatMut&#39s income-drawdown and self-invested personal pensions&#39 expertise alongside its annuities, guaranteed bonds […]

Porteus re-elected as Sofa chairman

Sofa has re-elected John Porteous as is its chairman for the next year and appointed two new vice-chairs. Phil Billingham Associates chairman Phil Billingham and Informed Choice managing director Nick Bamford will serve as vice-chairmen for the forthcoming year, taking over from Keren Milton and Richard Anderson. Billingham has been a Sofa director since 1999 […]

Newcastle BS profits up

Newcastle Building Society made a post-tax profit of £12.1 million last year, up 10 per cent from £11.3m in 2000. Its gross lending rose to what it says is an all-time record of £496m, up 36 per cent from £361m in the previous year. Group assets were up by 10 per cent to £2.6 billion […]

Clerical doubles money in pension projection blunder

Clerical Medical has sent out incorrect pension valuations to over 2,500 policy- holders, telling them their funds were worth more than double the real value.The error saw Clerical write to 3 per cent of its 95,000 personal pension policyholders.One policyholder saw his pension fund plummet by 140 per cent in two months. He was told […]

Pension savings-2015

Pension tax relief: parked (for the moment)

The national news agenda has been dominated by pension issues this month. For those that missed it (and there cannot have been many given that this was the lead story in spoken and written media), the Chancellor announced a decision to make no decision on pension tax relief in his 16 March 2016 Budget speech. To […]


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