Monthly archive for May, 2014

Top 10 Income Ideas for 2014

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Income needs are a top priority for both savers and investors, evidenced by the increasing number of our existing customers and those new to Fair Investment looking for income solutions. With this in mind, we have put together our Top 10 income ideas for 2014. From a fully capital protected bank deposit and a unique fixed income investment, to investment funds and fixed term investment plans offering high yield opportunities, there should be something here that appeals. We also give you our in-house view of each from Oliver Roylance-Smith, our Head of Savings and Investments and for those who are yet to use their ISA allowance, all are available within an ISA so you could benefit from tax free income.

1.   Income best seller – 5.40% fixed income, monthly payments

The Enhanced Income Plan from Investec was our most popular income investment in 2013 and continues to be a best seller. The main appeal is that it offers a fixed income for a fixed term, regardless of the performance of the FTSE 100 Index, so you know exactly how much you will receive, when and for how long. The annual income is currently 5.40% (paid as 0.45% each month) which is high when compared to typical yields currently being paid by equity income funds. Capital is at risk if the FTSE drops by more than 50% during the plan and fails to recover by the end of the term, in which case your initial capital will be reduced by 1% for each 1% fall, so you could lose some or all of your initial investment. There are no annual management charges with this plan.

Fair Investment view: “5.40% tax free income (if held in an ISA) is the equivalent of 6.75% taxable income for a basic rate tax payer and 9.00% for a higher rate tax payer. This high level of fixed income and the monthly payment frequency are popular features and with ongoing uncertainty around future interest rates and dividend yields, this plan offers a competitive balance of risk versus reward that could be considered by both savers and investors”

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Investment Focus: Gilliat new launch offering a potential 34.5% annual returns

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Depending on which of the two investment options is selected, the latest launch from Gilliat offers investors the potential for either 15.85% or 34.5% per year, along with the ability to mature early or ‘kick out’ each year from the end of year one onwards. As the plan name suggests, the returns on offer from the 3 Stock Dual Option Kick Out plan are dependent on the performance of three FTSE 100 listed shares and as such, should be considered by experienced investors only. With the potential for such high headline returns, we take a closer look at how this new investment plan works in order to better understand the risk versus reward.

New launch

Investment plans that have the ability to mature early each year or ‘kick out’ are popular with investors in all market conditions, especially when they can mature from the first year onwards. These investments also seem to gain increased interest when the stock market is at historically high levels since they are often structured in a way that can produce competitive returns even if the market stays relatively flat, or indeed goes down – and this is exactly what the latest launch from Gilliat offers investors.
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Take the Income Challenge

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Generating an income is one of the most constant demands placed on our capital, and yet the questions posed by the savings and investment landscape remain as challenging as ever. From the wide range of savings and investment plans to choose from and which features to consider, to the greater freedom available from ISAs, it is more important than ever that all options are considered carefully. But where do you start? We take a quick tour around the current challenges being faced by income seekers as well as highlight some of the more popular savings and investment options being used by our customers.

The here and now

For income seekers, the aftermath of the global financial crisis is still very much upon us as the period of record low interest rates continues and historically low savings rates hamper cash savers to achieve returns anywhere close to those seen in previous years.
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