It is unlikely that the stockmarket will go up by much more than 8 per cent a year, tax free, over the next five years. For growth investors, the 55 per cent return, subject only to capital gains tax if bought directly outside an Isa or Pep transfer, is also highly attractive.
Of course, there is some risk in that the five-year regular income bond is linked to the Dow Jones Stoxx 50 index. The index is comprised of 50 big stocks across Europe, with significant exposure of 38 per cent to the UK in addition to 17 other countries including Germany, France and Switzerland.
Full capital will be returned provided that, over the five-year period, the index does not fall by more than 40 per cent without recovering to its initial level by maturity.
If it does fall and fail to recover, 1 per cent of the capital is lost with each fall of 1 per cent in the index.
Barclays Wealth now deals through IFAs and pays normal commission. It is highly rated by Future Value Consultants, the independent investment analyst. I think there is little risk of losing capital but even if the index does fall over five years, income investors will still make good total returns as the income is secure whatever happens to the index.
I believe that all equity Isa and Pep investors should consider transferring a big part of their Isa investments to this product, especially if they are near retirement, while direct investors who are unlikely to pay big amounts of capital gains tax should seriously consider the growth option.
The plan is open until December 4 for Isas and/or Pep transfers.