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Keydata fills income gap

Keydata has introduced a new issue of the extra income plan, a capital-protected bond linked to the performance of the FTSE 100 index for a term of five years.

The bond, which is also available as an Isa and for Pep transfers, provides a choice of annual income at 6.25 per cent gross, quarterly income of 1.53 per cent or a growth option of 35 per cent at the end of the term. Investors will also get a full capital return unless the index falls by more than 30 per cent and fails to recover to at least its starting value. If this safety net fails, the capital would be reduced by 1 per cent for every 1 per cent fall in the index.

Currently most structured products are designed to provide growth rather than income. Some products provide a combination of income and growth by investing some of the capital in a structured product for growth and the remainder in a fixed-rate deposit account to provide income. However, these products are aiming at a different market and tend not to put capital at risk because the income is derived from a deposit account not derivatives.

The only other product to focus on income is Nvesta&#39s safety net income plan 2, which offers annual income of 5.6 per cent a year paid quarterly net of basic rate tax. However, with returns quoted on a net basis and a lack of a growth option, it may not be comparing like with like.

The Keydata product fills a gap in the market for an income-producing product but the potentail for a one for one reduction in capital could lead to heavy losses if the index does not perform as investors would expect.


&#39House prices grinding to a halt&#39 – Rightmove

The rise in house prices is grinding to a halt in the North and Northwest according to Rightmove, which looked at asking prices from August 14th to August 28th. Rightmove says national asking prices fell by 0.6 per cent or £1,217 in the last two weeks and puts the average property asking price at £191,118. […]

Survey will set out a league table of IFAs

IFAs will be ranked in terms of efficiency and profitability under a new study being launched by the Institute of Financial Planning, Aifa and Clerical Medical. A survey, run by Advisor Impact, will be sent to around 5,000 businesses on the databases of Aifa and IFP and will ask questions about each firm&#39s profitability, productivity, […]

Abbey relaunches loan club with new services

Abbey for Intermediaries is relaunching loan club The Mortgage Alliance to cater for directly authorised loan brokers with support services provider Threesixty. TMA will offer enhanced services and facilities to help intermediaries adapt to regulatory changes as well as a new flexible compliance service tailored to meet the needs of individuals. The service will be […]

Commission to recommend compulsion

ABI director general Mary Francis says she believes pensions commission chair Adair Turner will recommends the Government adopts compulsory pensions in the workplace. The pensions commission was established after a Government white paper on pension reform issued in 2002.

Tax allowances and exemptions

Helen O’Hagan, Technical Manager at Prudential, looks into the planning strategies that can deliver considerable tax savings for your clients. Inheritance tax (IHT) Consider Margaret, featured on our Planning Matters family hub, who is a sprightly eighty year old with four children and several grandchildren. She’s recently been widowed and IHT planning is high on […]


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