Jubilee plan aims at 185% of RPI growth

According to Chris Powell, the plan aims to pay investors 185 per cent of the growth of the retail price index between October 2011 and July 2017.

If the FTSE 100 is 50 per cent or more below its initial level, investors’ capital will be reduced by 1 percentage point for every 1 percentage point the index is below its initial level.

Mr Powell said in the event that capital is reduced, investors will still get 185 per cent of any growth in the RPI.

He added: “With inflation currently running at levels not seen since the early 1990s, low interest rates and uncertain stock markets most investors will struggle to protect the purchasing power of their capital.

“This product offers a return at the current inflation rate of 5.6 per cent a year, a participation of 185 per cent equates to 10.3 per cent a year, although the expectation is inflation is likely to abate over the medium term.”

Mr Powell said while the plan does not pay a regular income, it will fit into many investors’ portfolios due to the potential returns it aims to generate and the opportunity it provides for capital to more than keep pace with rising prices.

Clients can invest from £10,000 up to £1m. The counterparty is taxpayer-owned Royal Bank of Scotland.

Kevin Tooze, managing director of Essex–based IFA Equity Partners UK, said: “In my experience my clients prefer kick-off plans with capital flexibility during these current uncertain times.

“There are uncertainties regarding where the FTSE 100 might go. Also what if inflation falls in the next few years? The RBS is also not a AA+ rated bank, all of which would lead the product above the medium-level risk rating.”