Norwich Union is launching an investment plan for customers who want to benefit from increases in the FTSE 100 while protecting their initial investment.
Norwich Union is launching an investment plan for customers who want to benefit from increases in the FTSE 100 while protecting their initial investment.
The Norwich Capital Protected Plan 2 is designed to return twice the increase in the FTSE 100, up to a specified maximum, and protect customers' initial investment. Two versions of the Norwich Capital Protected Plan 2 are available giving customers a choice of investing for three or six years.
The three-year plan offers the return of the initial investment plus twice the percentage rise in the FTSE 100 Index, with the total amount paid capped at 27%. (See example below).
| 3 YEAR PLAN | Index level at star | Index level at maturity date (averaged) | Return to investor at maturity | Return on £5,000 initial investment |
Notes |
| Index increases by 5% | 6,000 | 6,300 | 110% | £5,500 | Return of 2 x the Index increase of 5% |
| Index doubles | 6,000 | 12,000 | 127% | £6,350 | Return of 2 x the Index increase capped at 27% |
| Index falls | 6,000 | 5,870 | 100% | £5,000 | Return of capital, no growth |
The six-year plan offers the return of the initial investment plus twice the percentage rise in the FTSE 100 index, with the total amount capped at 72% (see example below).
| 6 YEAR PLAN | Index level at strike date | Index level at maturity date (averaged) | Return to investor at maturity | Return on £5,000 initial investment |
Notes |
| Index increases by 5% | 6,000 | 6,300 | 110% | £5,500 | Return of 2 x the Index increase of 5% |
| Index doubles | 6,000 | 12,000 | 160% | £8,600 | Return of 2 x the Index increase capped at 72% |
| Index falls | 6,000 | 5,870 | 100% | £5,000 | Return of capital, no growth |
These are only examples and the returns may be more or less than shown or words to this effect. For both plans, capital protection and investment returns only apply if the plan is held for the full term. If the plan is cashed in early the investor will receive the underlying value of the investment at that time, which could be less than the original amount invested. Partial encashment during the term is not permitted.
Investment Levels
Minimum investment is £1,000. There is no maximum investment, but usual ISA limits apply if the investment is held in an ISA (six year Plan only).
Returns are taxed as capital gains, unless held within an ISA.
Customers' money is invested in Medium Term Notes. A Medium Term Note is a type of corporate bond which is effectively a loan to a company. At a set time, the company pays back the loan and provides a return linked to the FTSE 100 Index. The Company we've selected to provide the Notes is financially strong. However, there is a possibility that the Company could fail. In the unlikely event that the Notes provider defaults or becomes insolvent, the customer's investment would be at risk and they could lose some or all of their investment.
Norwich Union calculates the end value of the FTSE 100 Index by taking an average of the value over the last six months for the three-year plan and the last 12 months for the six-year plan, to protect customers from sudden falls in the Index approaching maturity date. This means that the final value used for the Index may be less than the actual value it achieves at the maturity date.
John Clougherty, managing director of retail investments at Norwich Union, said: "This latest version of Norwich Union's Capital Protected Plan gives customers a simple, fixed-term investment that offers them the chance to benefit from growth in the FTSE 100 and provides the reassurance that their original investment is protected. The structured product market is growing fast and is proving attractive to investors who are made nervous by volatile stock markets."
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Press office contacts:
David Gwyer
07800 693187
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About Norwich Union
Norwich Union is the UK's largest insurer. It is a leading provider of life, pensions and investment products and one of the largest financial adviser (FA) providers. FAs provide over 70% of the company's long-term savings business in the UK.
Norwich Union is the UK's largest general insurer with a market share of around 14%, with a focus on insurance for individuals and small businesses.
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