How the investment works
What is the Protected Equity Bond?
The Protected Equity Bond is a deposit based plan which offers returns linked to the performance of the FTSE 100 Index. The Protected Equity Bond does not invest directly in company shares or investment funds and so helps to protect your investment if the FTSE 100 Index has fallen in value.
The Protected Equity Bond we currently have on offer is the Legal & General Stock Market Linked Savings Bond 14 (The Plan). The Plan is designed to return your original investment plus 100% of any growth in the FTSE 100 Index, subject to final year averaging, up to a maximum return of 51% of your original investment (7.10% gross p.a./AER*).
How the return is calculated
Final year averaging
Legal & General record the start level of the FTSE 100 Index at the close of business on 10 March 2012.
When calculating final year averaging, Legal & General record the closing level of the FTSE 100 Index for each business day in the final year of your investment and work out the average. This is the final year level.
Index Growth Level
Legal & General calculate the percentage change between the start level and final year level. This gives the Index Growth Level.
If there is no growth in the FTSE 100 Index you will receive back your original investment amount, plus any pre-investment interest earned. If there is growth in the FTSE 100 Index you'll receive back your original investment plus 100% of the Index Growth Level, up to a maximum return of 51% of your original investment. See the example investment tool
What companies are in the FTSE 100 Index?
FTSE 100 Index (UK): The UK’s top 100 companies listed on the London Stock Exchange. Currently includes names such as GlaxoSmithKline, Tesco and Unilever.
Notes
Tax treatment is dependent on individual circumstances. The tax information on our web pages is based on our understanding of current law and HM Revenue & Customs practice which can change.
* AER stands for Annual Equivalent Rate which illustrates what the interest rate would be if interest was paid and compounded once each year. This allows you to compare any minimum and maximum potential returns with other savings products. The gross rate of interest is the interest payable before any income tax is deducted.