Guarenteed Equity Bond from NS&I

There's similar trackers around, some like the nvesta are structured so any return can be claimed against your capital gains allowance (about 8K a year), I don't think NS&I offer such CGT advantages despite the nominal return being higher.

Ask again in 6 years :)

I`m only looking at a grand or so - put a few quid away towards having kids. Keep saving normally etc, but taking a lump sum from now (when I can easily do without it) and getting it back when (hopefully) kids will be being born/very young. I`m not expecting to have to worry about CGT for quite some time yet.

Fair enough :-)

In message , Aztech writes

Yers. The NS&I product, in effect, pays 5 years interest in one go. This could cause some tax payers into a higher band and some pensioners into the dreaded 2 for 1 reduction in their age allowance.

Dividend yield on the FTSE is apparently about 3.5% at the moment,

$3&menuItemId=-1&xml=/money/2005/04/23/cmisa23.xml so that could be about 19% over 5 years if income is reinvested at the same yield. So if the FTSE increases by more than about 76% over the next 5 years, you will be better off, or if it falls by more than about 19% you will be better off. If the return is in between these two levels, you would be better off with a normal index tracker. If dividend yields change over the period, you have to do a whole new set of calculations.

Bitstring , from the wonderful person john boyle said

Same problems as the Newcastle BS property index bonds. Why they don't structure those sorts of things to give 'capital growth' instead of 'interest' is a mystery to me.