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Julian Gibbs

A new tranche of the highly acclaimed GE Life high income and growth plan, rated eight out of 10 by Future Value Consultants, will be available from GE Life from April 8.

By cutting its margins, GE has still managed to achieve a 10 per cent a year tax-free income or 33 per cent growth over three years through Isas and Pep transfers.

The gross equivalents for basic-rate taxpayers are 11.25 per cent and 41.25 per cent respectively.

GE Life is a part of General Electric, one of the biggest companies in the world with a market capitalisation of around $360bn. GE has been named the World&#39s Most Respected Company by the Financial Times.

It is rare to be able to offer investors 10 per cent a year income from a company of this size and stature. Abbey National Treasury Services is providing the assets to back the plan.

Only if the Eurostoxx index falls by more than 20 per cent during the period and does not recover will investors&#39 capital not be repaid in full. With the index now around 31 per cent off its high, it is highly unlikely to fall much further.

For direct investments outside an Isa or Pep transfer, only 10 per cent tax on income is paid by basic-rate taxpayers and 32.5 per cent by higher-rate taxpayers, giving net rates of 9 and 6.75 per cent respectively.

With building society investors earning a maximum of around 5 per cent gross and paying 20 per cent tax, this plan gives them more than double the returns. With stockmarkets unlikely to rise by much over the next two or three years, returns of 10 per cent a year or 33 per cent growth are highly attractive.

Investors can transfer their underperforming Peps and Isas into this plan and it can also be used to provide for school fees, as children can invest in this plan and use their tax-free capital gains tax allowances even if their parents provide the funds.


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