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Is this
product
right for you? |
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To help you
decide if the Plan is right for you, here is a summary of key points
you should think about. Before investing, please consider not only
the benefits but also all of the risks associated with buying such a
product and the commitment you are making.
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Yes,
I am happy to invest because:
• I want to know the money that I invest will be repaid at
the end of my chosen investment term
• I want the opportunity to receive a return
greater than that provided by an ordinary deposit account at
the end of my chosen investment term
• I am unlikely to need access to my money
before the end of my chosen investment term
• I want the option to invest via an ISA and so receive
tax-free returns on my money (Five year Option and Early
Maturity Option only)
• I like the idea of gaining from an
enhancement to the Index return and accept my return being
subject to a maximum limit
• I have a minimum of £3,600 to invest
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No ,
this plan probably isn’t right for me
because:
• I will probably need access to some of my money before the
end of my chosen investment term and I cannot risk getting
back less than I invested
• I don’t want to risk getting back less
than I would have done if I had invested in a deposit
account or no return at all
• I am a regular saver and I prefer to be
able to add to my investments from time to time
• I don't accept the limit placed on the
possible return
• I want a regular income from my money
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Things to consider
Access to your money will be restricted
You should only invest in the Plan if
you are sure that you will not need to access your
invested capital over your chosen investment term. If
you withdraw early, you are unlikely to receive the full
amount you originally invested.
Investing in this product is not the
same as investing in shares
Payment of the investment return on all
three options depends upon the performance of the FTSE
100 Index. You need to bear in mind that the FTSE 100
measures only capital values of the shares included; no
allowance is made for dividends paid on the shares.
Will I get an income?
No, the objective of the Plan is to
provide capital growth and, at the same time, your
capital is protected provided you hold the investment
for your chosen term.
You need to consider inflation
Remember, whatever payment is made when
your Plan matures, inflation over the investment term
will have reduced the value of what you receive.
How does the Plan compare to a deposit account?
A deposit account is usually seen as the
safest form of investment and normally allows you ready
access to your investment. However, it provides no
opportunity for your capital to grow as cash deposits
only pay interest. In addition, the income generated by
deposit accounts is dependent upon interest rates and
these can vary with the general health of the economy.
In an environment of low interest rates, the returns
from cash deposits can be correspondingly low especially
once tax is taken into account. In contrast, the options
do not offer a regular income but provide the
opportunity for capital growth. Of course, the
Plan might still provide less return than a deposit
account would have done, or no return at all.
Will I have to pay tax?
If you
invest in the Five-year Option or the Early Maturity
Option via an ISA there will be no further obligation on
you to pay tax: all ISA investments and transfers are
tax efficient. However, if you invest directly into the
Plan (outside of an ISA) the returns will normally be
subject to Capital Gains Tax (CGT). All payments are
made gross and you will be responsible for declaring any
tax due to HM Revenue and Customs.
All UK resident individuals have an annual CGT exemption
(for 2008/09 it is £9,600) which means that the total of
gains made by an individual up to this amount in a tax
year will be free of CGT. This could include the gains
made under the Plan in the year of maturity. Any gain
achieved in excess of this amount, would be liable to
tax at a fixed rate of 18%. This said, the effects of
taxation depend on your individual circumstances and tax
rules can change. You should seek independent tax
advice.
What are the implications of
investing via an ISA?
There are two main types
of ISA – the Stocks and Shares ISA and a Cash ISA.
Stocks and shares (such as the investments within the
Protected FTSE Plan) and cash can be invested into an
ISA. Investors can have up to one Stocks and Shares ISA
and one Cash ISA in any one tax year, providing they do
not exceed their annual allowance – for the 2008/09 tax
year this is £7,200, although the maximum investment
into a Cash ISA is £3,600. All ISA investments are tax
efficient.
You can only use your ISA allowance once in any tax
year, so if you use it to invest and later decide to
withdraw your money, you will not be able to invest in
another ISA for the same tax year. Furthermore, if you
invest less than £7,200 in a Stocks and Shares ISA in
this Plan, you will lose the remainder of your allowance
for the tax year as no further contributions may be
added after the closing date.
It is important to remember that the favourable
treatment of ISAs might not continue. Existing ISAs may
lose their tax advantages and new ones might not be
permitted, although the Government has stated that it
sees ISAs as part of the Government’s primary savings
vehicle outside pensions. The value to you of these and
other tax reliefs depends on your individual
circumstances. You should bear in mind that tax rules
can change.
Please refer to the Brochure and the Terms & Conditions for full
details. |
