The biggest problem for both savers and investors this ISA season is finding a high enough level of income that could beat inflation and still offer a decent overall return. With the potential for 8% income each year, the Money Builder Deposit Plan from Societe Generale offers the opportunity to do both.
Your return is based on the performance of five FTSE 100 companies rather than the Index itself. Provided all five shares are at or above 95% of their starting levels at the end of each year, you will receive an 8% payment. If one or more shares are below this level, no income will be paid.
If you’re looking for an alternative to low savings rates, then the opportunity to link your returns to the FTSE 100, and then multiply them by 150%, could be a compelling one. Whilst the FTSE 100 is at historically high levels, it can be difficult to know which course to take, but not only does the Growth Deposit Bond from Legal & General offer full capital protection, it also multiplies any growth in the FTSE 100 over the 6 year term by 150% (subject to averaging and a maximum return of 40%).
The SocGen Kickout Deposit Plan combines the potential for a high return with the opportunity to mature early, which means you could see a return of 12% in just two years. Along with capital protection this plan gives savers a real opportunity to beat low fixed rates – just in time for ISA season, too.
Your return is based on the performance of five FTSE 100 companies rather than the Index itself. If all five shares are at or above their starting levels at the end of years, 2, 3, 4 or 5, the plan will mature early and you will receive 6% for each year (not compounded). In the final year the share values need to be at least 90% of their initial value, in which case you would receive 36%. If the value of the shares is lower on all of these dates you will only receive a return of your initial deposit.
ISAs are overtaking pensions for the first time ever in terms of popularity with savers. According to the Office of National Statistics, we collectively put £14.3 billion into our personal pensions in the 2010/11 tax year. This sounds fairly substantial – until you compare it with the £15.8 billion that the British public invested in stocks and shares ISAs the same year. While pensions have traditionally been seen as a safe way to save for retirement, successive changes to the system coupled with the lack of security caused by the demise of final salary schemes, has understandably left many savers wondering if an ISA might be a better home for their hard-earned money.