Barclays issues enhanced Defined Returns Plan

Barclays is launching an enhanced version of its best selling Defined Returns Plan, featuring an improved five-year kick-out option offering investors a 10 per cent annual return for each year the plan is in force.

The Defined Returns Plan, launching today, offers investors a fixed return of either 20 per cent (three-year option) or 42.5 per cent (five-year option) provided the level of the FTSE 100 at maturity is equal to or higher than its level at the starting date. Both options are capital protected if held to maturity.

The plan, which closes on 7 February, also features a five-year kick-out option which offers investors a 10 per cent annual return for each year the plan is in force. If the index is either the same or higher than its starting level on any annual anniversary, the plan will automatically mature and deliver the accumulated return.

In the event of the FTSE 100 being lower at maturity than it was at the starting date, investors will receive back all of their original investment unless the index falls by 50 per cent and fails to recover to its initial level by maturity, in which case capital is lost 1:1 with the index.

Returns are taxed as capital gains, allowing investors to use their annual CGT exemption. This treatment also frees investors to use their Isa allowance for a different investment, although the two five-year options can be placed within an Isa.

The minimum investment is £4,000.

Colin Dickie, director, Barclays Wealth, says: “The Defined Returns plan continues to be very popular with advisers and we expect the enhanced kick-out option to generate a great deal of interest.

“The plan offers investors the best of both worlds and we continue to work hard on designing products that reflect market conditions. Advisers’ jobs are particularly difficult right now and we hope that plans such as this go some way to making their lives easier.”