Barclays Wealth boosts new Defined Returns kick-out to 11 per cent

Barclays Wealth for Professional Advisers has boosted the pay-off on the annual kick-out option of its latest Defined Returns Plan as it closes the previous series a week early due to investor demand.

The new kick-out option offers investors an 11 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.

The investment, which is open between 1 February and 4 April, also features two capital protected options delivering a fixed return of either 18 per cent (three-year option) or 38.5 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.

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. Advisers receive 3 per cent commission (2.50 per cent for three-year option).

Lisa Chaudhuri at Barclays Wealth says: “The previous series will close a week early due to strong demand and the replacement plan should prove equally popular, particularly as we have improved the annual kick-out option despite market volatility. We believe 11 per cent is a very attractive rate for investors willing to accept some risk to capital.”