Norwich Union is to launch a Guaranteed Growth Plan that guarantees a minimum return of 20% regardless of what happens to the FTSE 100.
Norwich Union is to launch a Guaranteed Growth Plan that guarantees a minimum return of 20% regardless of what happens to the FTSE 100.
The Guaranteed Growth Plan has been designed to provide a return after six years of either 20% of the investor’s original premium, or 65% of the growth from the FTSE 100 (averaged over the last six months of the plan), whichever is higher. (See notes to editors).
The plan is a six-year single premium product which will be available for eight weeks from 26 July 2004. It can be held as a direct investment or held in an Isa, or as a Pep transfer, and the minimum investment is Ł3,000.
It will be distributed by IFAs and through building societies by Norwich Union’s partnership sales network.
Neil Davies, head of investment product development at Norwich Union, said: "We expect that the Guaranteed Growth Plan will be popular with customers because it offers a guaranteed minimum return if the plan is held for its full term.
"It will appeal to investors who like the idea of a minimum return even if the stock market falls, and the possibility of an even better return if the stock market does well."
Full details of the guarantee and how it applies are detailed in the key features document which is available from the IFA or building society adviser. The guarantee does not apply if the plan is cashed in early. If the plan is cashed in early, the customer may get back less than the amount they invested.
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Notes to editors:
About the Norwich Union’s Guaranteed Growth Plan
The Norwich Union Guaranteed Growth Plan will be a six-year single premium product available as a direct investment, Isa or Pep Isa transfer. The minimum investment is Ł3,000.
At maturity the plan is designed to return, the higher of: 20% of the capital invested or 65% participation in the FTSE 100, unlimited growth potential. The final valuation of the FTSE 100 will be based on the last six months of the term, with the final value averaged daily over that period.
Full details of the guarantee and how it applies are as detailed in the Key Features document which is available from IFAs and building society advisors.
How the Guaranteed Growth Plan works
Example: Index falls 25%
Start date Index level: 4000 (Ł10,000 premium)
End date averaged Index level: 3000
Loss over the six-year term = 25%
Return on maturity = 20% (Ł12,000 maturity)
The value of the FTSE100 over the six-year period falls therefore 120% of the original investment is returned.
Example: Index rises 25%
Start date Index level: 4000 (Ł10,000 premium)
End date averaged Index level: 5000
Growth over the six-year term = 25%
Return on maturity = 20% (Ł12,000)
Example: Index rises 40%
Start date index level: 4000 (Ł10,000 premium)
End date averaged index level 5600
Growth over six-year term (40%)
Return on maturity 26% (Ł12,600)
About Norwich Union
Norwich Union is the UK's largest insurer. It is the UK's largest provider of life, pensions and investment products and one of the leading IFA providers. IFAs provide around 75% of the company's long-term savings business in the UK. Norwich Union has strategic alliances with building societies and other leading UK brand names including Tesco Personal Finance and The Royal Bank of Scotland Group. Norwich Union’s news releases and a selection of images are available from Aviva's internet press centre at www.aviva.com/media.