However, NDFA has produced the regular fixed-income plan which pays 8 per cent a year for a period of five-anda-half years or 0.65 per cent monthly.
There is some risk in that if the FTSE 100 index falls by more than 50 per cent from its initial index level and does not recover, the amount of capital returned to the investor is reduced on a 1 per cent for each percentage fall of the initial index value on maturity.
However, if it does not fall by 50 per cent, the investor gets the full amount of capital, even if the final index level is below the initial index but not by more than 50 per cent.
Future Value Consultants give it a high rating and estimates there is a 95.4 per cent chance of the capital being returned in full. This is a much lower risk than most products of this kind.
It is an ideal tax-free investment for Pep and Isa transfers and for investment in pension funds such as SSASs and Sipps. This product has a higher minimum investment than most in that the minimum is £10,000 and the maximum is £1m for a direct investment.
Dividends from direct investments are taxed free for basic-rate taxpayers and higher-rate taxpayers only pay 25 per cent tax due to changes in the last Budget.
The date on which the index is calculated is June 16, 2008 and the final FTSE 100 maturity price is calculated on December 16, 2013.
I think it is most unlikely that the stockmarket will fall by more than 50 per cent from current levels over five-and-a-half years but I do not believe that investors should put the whole of their assets into this product.