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Julian Gibbs

Eurolife has come up with an excellent Dublin-based income and growth plan offering 10 per cent a year over five years or a monthly income of 0.8 per cent. It is called the Investment Plus Plan.

With interest rates likely to remain at low levels, this return is outstanding, especially as the downside risk is extremely low. It is linked to the FTSE 100, S&P 500 and Nikkei 225 indices. The capital is returned in full provided that none of the indices falls by more than 35 per cent during the investment period or the final level of all the indices is at least 95 per cent of their opening levels.

With the FTSE 100 and S&P 500 now at around 25 per cent off their highs and with Nikkei 225 at around 75 per cent off its record high, the likelihood of any of these indices falling by a further 35 per cent and not recovering to 95 per cent of their opening levels is remote.

The growth option is also generous at 65 per cent. This plan is an ideal investment for Pep transfers and double Isa investments for those requiring income or capital growth as the returns will be completely free of tax. For direct investment outside an Isa or Pep transfer, basic-rate taxpayers pay 10 per cent tax and higher-rate taxpayers 32.5 per cent.

The growth option outside an Isa or Pep wrapper is subject to capital gains tax but, based on the current allowance of £7,500 per person, each member of the family, including children, can invest up to £13,573 and receive a tax-free sum of £22,395 at the end of the period.

It is an ideal way of building up capital for children with minimal risk.

This plan is quite rightly rated nine out of 10 for higher-rate taxpayers and eight out of 10 for basicrate taxpayers and non-taxpayers by Future Value Consultants. It looks to me to be a winner.

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