Legal & General launches Capital Protected Index Plan 1

Legal & General's latest product in its capital protected investment range, Capital Protected Index Plan 1 (CPIP1) is launched to independent financial advisers on 13 July 2009 and will be available for investment up until 4 September 2009.

Capital Protected Index Plan 1 is an investment that gives a return of 26 per cent, dependent on the performance of the FTSE 100 Index, as well as providing capital protection on maturity (which is 9 September 2014). If the FTSE 100 Index has grown or stays at the same level at the end of the five years the growth will be 26 per cent plus the original investment. If, however, the FTSE 100 Index has fallen at the end of the five year term the original investment will be returned.

Legal & General's Director, Business Development Jamie Vale says "This marks our return to a product being linked to a single index - FTSE 100. Capital Protected Index Plan 1 could be ideal for customers who are looking for the potential of a set growth return and are happy to hold their investment for 5 years, but want the reassurance of knowing that their initial capital is protected at maturity. Customers can invest as a stocks and shares ISA, as a direct share investment or by transferring any existing ISAs that they hold. For the cautious investor this could offer an excellent tax efficient way to invest for the medium term.

We are continuing to see growing demand for guaranteed and protected investments and, with interest rates continuing to fall, advisers are in need of serious alternatives to cash based investments. Our Capital Protected Index Plan 1, offering 100% capital protection and the potential for a set growth return, could be an ideal option."

Investment is available as an ISA, ISA transfer or through direct shares. The minimum investment is £500. ISA Investors may invest up to £7,200 in the 2009/2010 tax year. There is no maximum investment for ISA transfers and direct shares investments.

Although capital is protected at maturity it is not guaranteed. In order to provide the capital protection and stated return, the money is used to purchase a range of interest bearing securities and some option(s) from a range of high quality financial institutions that have at least an ‘A' or ‘A2' financial strength rating (source: major global rating bodies). These institutions are considered financially secure by their nature. However, if they default on their payments, Capital Protected Index Plan 1 will be unable to meet its stated objectives and investors will not get back all of their original investment or the stated return. This investment does not take account of dividends that would be available through holding shares directly in the companies that make up the FTSE 100 Index.

Capital Protected Index Plan 1 pays a commission to advisers of 3 per cent of the sum invested (no commission on moving from existing Legal & General investments). IFAs, who require more information on Capital Protected Index Plan 1, should contact their normal Legal & General representative or call the Investment Helpdesk 0845 070 6452. Lines are open from 9am to 5pm Monday to Friday. We may record and monitor calls. Call charges will vary.