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Bristol & West plays family fortunes

Bristol & West has teamed up with Family Assurance to establish the
Family protected savings plan, a capital-protected unit-linked
endowment linked to the performance of four stockmarket indices.

The product marries the capital protection of Bristol & West&#39s
structured products with the tax privileges of friendly society plans.
Friendly societies can offer tax-free returns on regular savings plans
up to £25 a month without the investor having to use their Isa
allowance.

With this plan, investors contribute £25 a month over the 10-year term
and they also get up to £2,250 of life cover. The life cover is included
to ensure the tax-free status of the investment and is not a major
benefit of the plan, particularly as it is reduced if policyholders are
over 55.

Providing investors pay the premiums during the term, they will get all
their capital back at the end of the term plus 85 per cent of the
average growth in the indices. This is calculated by measuring the
closing level of each index during the first 12 months of the term and
comparing this figure with the average growth in the indices over the
final 12 months of the term.

It is important that investors can commit to paying the premiums, as
they will get nothing back if they miss a payment within the first 12
months. After this period they are given a month to catch up with
missed payments, otherwise the policy will automatically be
surrendered.

If investors surrender before the end of the term, the capital protection
does not apply. They will have to pay a surrender charge that will
reduce the returns and may incur a tax liability. This makes it more
suitable for long-term savings goals such as saving for children
compared with capital-protected products that are not structured as
an endowment.

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