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Julian Gibbs

When Dr Tim Mortimer of Future Value Consultants gives a plan a rating of nine out of 10, I always have a very careful look

at it. He gives this rating to the NDF/Abbey National Treasury recovery growth plan for both higher- and basic-rate taxpayers.

I certainly agree that this plan gives a high potential return with hardly any risk at all. It offers

100 per cent of the growth in the FTSE 100 over five years with 100 per cent capital security unless, during that time, the index falls by more than 50 per cent – a

much higher downside protection than with most other products.

Even then, it pays out in full provided the FTSE 100 is at or above the level it was at the commencement of the plan. So, for example, even if the FTSE 100 fell by up to 50 per cent at the end of the five-year period and had not fallen by more than 50 per cent during the five years, investors would still get their full capital back.

Since the FTSE 100 was launched in January 1984, the average growth over more than 3,000 completed five-year investment periods is 68 per cent. The maximum return would have been 127 per cent and on no occasion would the 50 per cent safety zone have been breached.

It is a much safer bet than a tracker fund and the only loss would be

the dividend yield on the FTSE 100, which is very low after tax. This is a small price to pay for such high protection.

You can invest tax-free through an Isa or a Pep transfer and can take advantage of both this year&#39s and next year&#39s Isa allowances so that a husband and wife can invest up to £28,000 tax-free.

For direct investments, gains are subject to capital gains tax but, for most people, the gains should come within their capital gains tax allowances. This plan should be a winner.


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