Merchant Capital has launched a new income plan, The Merchant Capital Income Plan: Capital & Income Lock-In, offering a maximum annual income of seven per cent per annum (1.75 per cent paid quarterly).
The plan is based on the FTSE 100 Index.
Income of seven per cent per annum is paid quarterly (1.75 per cent per quarter) providing the FTSE 100 does not fall by more than 40 per cent on quarterly observations.
There is full capital protection and locked-in future income if the FTSE 100 is 25 per cent above its initial level on any annual anniversary date.
If the final level of the FTSE 100 is more than 40 per cent below its initial level, there will be some or full loss of capital. However, if the FTSE 100 is 25 per cent or more above its initial level on any anniversary date, capital becomes fully protected.
It is available as a direct investment, stock and shares Isa for tax year 2010/11 and for Isa transfers.
The minimum investment is GBP5,000 up to a maximum of GBP2m.
John Gracey, director of structured products at Merchant Capital, says: “Our aim is to be the largest independent structured product provider in the UK retail market and a provider of innovative but straightforward structured products offering investors a real alternative to other plans in the market.
“Our latest product is a new competitive income structured product investment plan, backed by a well known UK bank. It offers income at a rate of seven per cent per annum in an environment where there remains considerable doubt as to when it will be possible to raise interest rates without jeopardising the fragile recovery of the world’s economy.”