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Julian Gibbs

It is extraordinary how most investors behave. They buy at the top of the stockmarket and often sell at the bottom. They buy a suit in the sales at 40 per cent off and it wears out after a year or two but 75 per cent of investors will not buy at bargain prices and see their investments rise considerably after a few years. They are, of course, wrong.

The other 25 per cent, advised by intelligent IFAs, do buy. It has always proved sensible in the past to buy stocks after a major disaster. So what is the answer? I believe that the NDF extra income & growth plan 9, with plan assets backed by Abbey National Treasury Services and which gives a 10.25 per cent annual income for three years and months or 34 per cent growth, is a bargain.

The terms of the plan were fixed before the last four base rate cuts and the downside risk is minimal as the EuroStoxx 50 index, to which it is linked, can fall by a further 20 per cent from its current levels – which are already more than 30 per cent below its highs – before capital is put at risk. I very much doubt whether there will be a better opportunity to invest in a 10 per cent income plan for the foreseeable future.

This is the first plan this year which enables investors to take advantage of a double Isa opportunity as they can invest for both the current and next tax years. For example, a married couple can invest £28,000 in Isas in this plan. At the end of three-and-a-bit years, growth investors should receive £37,250 and income investors should get back £28,000 having been paid £8,610 in income.

On direct investments, basic-rate taxpayers pay only 10 per cent tax on income and higher-rate taxpayers pay only 32.5 per cent. A family of four can potentially invest up to £92,800 directly into the growth option and receive £31,552 tax free.

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Case study: administration — managing group life schemes

Our client leads the global market in high-tech electronics manufacturing and digital media. The trustees of the company’s final salary pension scheme insure death-in-service lump sum and dependants’ pension death benefits for active employees, as well as dependants’ pension benefits for deferred members (those who have left service).

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