Barcays stocks and shares isa transfer

raintownjimmy

Has anyone invested in (or even heard of) the Barclays stock and shares ISA for 2009/2010 (and 5 years after) which works like this. You put your money in and if, at the end of the the year it has been running (Aug 09 to Aug 10) the FTSE is the same or higher then your money earns 10% interest and you get your money out. If it doesn't go higher, then your money stays in for a second year and if the FTSE is the same or higher than the start date, at the end of the second year, you get 20% interest and your money back. This arrangement can go on for 5 years with a potential 50% interest if it goes on for the full five years. However, if the FTSE is STILL the same or lower than the Aug 09 start date then you get NOTHING just your money back. I may not have described it quite correctly but does anyone recognise it and do you have a view on whether it is a reasonable or unreasonable risk? I have around £18k cash isas which I am thinking of transferring in.

dunstonh

does anyone recognise it

Yes. Its a guaranteed equity bond. Issued by a number of providers. Barclays are the best of the banks but you can usually get better.

raintownjimmy

Thank you, so do you think it's reasonable product? My new IFA is recommending it. I just have no real take on how risky it is, I suppose the chances of the FTSE not recovering for 5 years IS fairly unlikely! You say I can get better, but is there much in it? If so where would I go to find better? This is money I am happy to tie up and would like to get best possible return as it will form part of a pot to infill some lean years before some pensions kick in in about 10 years time. Appreciate your input very much.

dunstonh

GEBs are normally poor value. However, there are some good deals that appear attractive at the moment (based mainly on the FTSE looking attractive for longer term as you say).

Barclays dont have the best terms out there but what they do have is probably the best market counterparty risk level. Your IFA could be trading a bit on the terms to go with safety. That is not uncommon and I have done that myself. There is a lot to be said with going with brand names you know and trust are going to be there in future and not try and push that tad extra in schemes that may carry a little more risk.

The terms offered throughout this year with each tranche (version) have been getting lower and I have been told that trend is expected to continue. A few of the normal GEB providers you would look at are not offering plans at the moment or are more focused on income.

I just have no real take on how risky it is

The underwriter of the plan is one risk. Barclays are very strong on that point. The other risk is the FTSE and that is a judgement call that only time will tell.

raintownjimmy

Thanks for that - I think I will go with it.