View more on these topics

Jubilee introduces early redemption plan

Jubilee Financial Products has brought out issue five of its FTSE 100 index-linked early redemption plan.

The five-year plan is designed for sophisticated investors with an appetite for risk. It has an early maturity feature that will be triggered if the index is at or above its initial value at the end of any plan anniversary. Investors will receive growth of 8.25, 16.5, 24.75, 33 or 41.25 per cent at the end of years one to five respectively. They will also get their original capital back.

Where the index is never at or above its initial value, investors will get no growth payment, but will get a full capital return provided the index does not fall by 50 per cent or more during the investment term. If it does, investors will still get their original capital back if it recovers to at least its initial value by the end of the term. Where the index breaches the 50 per cent protection barrier and does not recover, investors will lose 1 per cent of their capital for every 1 per cent fall in the index.

Jubilee says that the product literature takes into account all the concerns voiced by the FSA regarding the transparency of structured products.

However, one potential drawback is that the returns are treated as income and are subject to income tax, even though no income is paid from the plan. This means investors cannot use their annual capital gains tax allowance. Due the £15,000 minimum investment, which is higher than the maximum for new Isa investments, tax-free returns are only possible through Isa transfers.


Pension disregard raised to £10,000

Pension credit capital disregard has been increased from £6,000 to £10,000. The move will mean that 540,000 people will see their means-tested benefits increase by £4 a week.

Value for money in DC pensions

The Pension Policy Institute (PPI)’s recent report “Value for money in DC pensions” tries to identify factors by which people can assess whether their pension offers fair value for money (VFM). Fiona Tait provides an overview of the findings. Positive Outcomes It is extremely hard to assess VFM in a pension. Press activity naturally focuses […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment