Norwich Union is to launch a second tranche of its Guaranteed Growth Plan.
Norwich Union is to launch a second tranche of its Guaranteed Growth Plan.
The plan guarantees a minimum return of 20% regardless of what happens to the FTSE 100. It was first launched in July and proved so popular with customers and IFAs that Norwich Union will launch a second tranche on 1 November 2004.
The Guaranteed Growth Plan has been designed to provide a return after six years of either 20% of the investor’s original premium, or 60% 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 and will be available for six weeks from 1 November 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. The offer closes on 10 December 2004.
Neil Davies, head of investment product development at Norwich Union, said: "The Guaranteed Growth Plan has been very popular with customers because, if the plan is held for its full term, they will see their money grow whatever happens to the FTSE 100. They 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."
He added: "IFAs like the plan because two layers of protection make up the guarantee; most rival products offer only one layer of protection and are more risky. It is also simpler than many other structured products on the market."
Full details of the guarantee and how it applies are detailed in the key features document which is available from Norwich Union. 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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Louise Soulsby 01904 452617 Out of hours 07800 699526
Notes to Editors
About 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 60% participation in the FTSE 100, with unlimited growth potential. The final valuation of the FTSE 100 will be based on the last 6 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 Norwich Union.
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 6-year term = 25%
Return on maturity = 20% (Ł12,000 maturity)
The value of the FTSE100 over the 6-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 6-year term = 25%
Return on maturity = 20% (Ł12,000)
Return is greater of 20% minimum return (plus return of capital) or 60% of 25% of index’s growth, therefore the return is 20%.
Example: Index rises 40%
Start date index level: 4000 (Ł10,000 premium)
End date averaged index level: 5600
Growth over 6-year term = 40%
Return on maturity 24% = Ł12,400
Return is greater of 20% minimum return or 60% participation in 40% of the index’s growth, therefore return is 24%.
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.