LEGAL & GENERAL PLC 
By
Inflation Protected Deposit Bond 2 (IPDB 2) is a five year
fixed-term structured deposit bond, which offers investors a
minimum return of 16.0% at maturity (3.01% AER) or, if
greater 100% of RPI growth on their original investment. The
new plan is available for investment for eight weeks from
Monday 9 January to Friday 2 March 2012. This is a limited
offer and Legal & General reserves the right to close the
plan early without notice.
Legal & General's Head of Business Development, James Harrington said, "Although the rate of inflation has fallen back slightly in recent weeks savers are aware that the gap between interest rates and the retail prices index (RPI) continues to present an inflation risk to their capital. The Bank of England Inflation attitude survey* published last month revealed that people expect the level of inflation to still be at 3.5% in five years time. If that happens the purchasing power of their savings would be reduce to less than 85% of today's value.
Our inflation protected deposit bond reduces this risk with its RPI link and provides growth even if inflation falls over the next five years. Investors in IPDB 2 receive a fixed minimum return of 16.0% (3.01% AER), or a payment linked to RPI, whichever is greater at the end of the five year term. Plus there is the added bonus that the deposit bond aims to return their initial capital at maturity.
Our first inflation protected bond offer proved extremely attractive to a wide range of investors. We think that our new inflation protected bond will also appeal to savers who are concerned that low interest rates combined with continued high inflation will reduce the real value of their savings over time."
The end of the five year fixed term is 22 March 2017. If investors take out some or all of their money before the end of the fixed term they may get back substantially less than they originally invested.
The minimum investment is £500 and the Bond is available as a deposit plan (for individuals, pension trustees, charities and corporate applications), new cash ISA applications (up to a maximum of £5,340) and for cash ISA transfers for which there is no maximum. The last date for ISA transfers is 17 February 2012 to allow time for completion of the transfer before the offer close date. The closing date for all other applications is 2 March 2012.
Commission is 2.5% of the sum invested. Full details for this product are available on the Legal & General dedicated website www.landgstructuredproducts.com.
Advisers can also contact Adviser Direct on 0845 273 0008 (Lines are open from 9am to 5pm Monday to Friday. We may record and monitor calls. Call charges will vary). Or email structured.team@landg.com
*Note: Source - the Bank of England quarterly survey of public attitudes to inflation, undertaken in November 2011, published on 15 December 2011
Notes to editors The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.
1. The contract start date is 22 March 2012 and the end of the fixed term is 22 March 2017. The maturity payment date is 24 March 2017 (note = payment to Legal & General).
2. This is a limited offer and may be subject to change and early termination at the discretion of Legal & General according to market conditions, without notice.
3. This plan is not suitable for customers who may need to access their money before the end of the five year term or who may be seeking a definite return.
4. The growth of the Retail Price Index will be measured between the January 2012 Retail Prices Index level and the January 2017 Retail Prices Index level.
5. The Inflation Protected Deposit Bond 2 is designed to return the original investment at the end of the fixed term. If investors take out some or all of their money before the end of the fixed term, they may get back substantially less than they originally invested.
6. Taxation - as this is a deposit investment any growth received is treated as interest. The cash ISA (and an ISA transfer) is a tax free investment. Any growth received through the deposit plan will be paid net of UK income tax at the basic rate (currently 20%). Non tax payers can reclaim this tax. Higher and additional rate tax payers will have further tax to pay. SIPP, SSAS, charity or company applicants can be paid without the deduction of income tax but only where sufficient documentary evidence is provided.
7. The Deposit taker is The Royal Bank of Scotland Plc (RBS).
8. The return on the original investment and any applicable returns are dependent on RBS paying this money to us. This might not happen if RBS default or become insolvent and unable to repay us this money. If they don't repay us, the investor could lose some or all of their original investment. RBS is a member of the Financial Services Compensation Scheme, which covers the first £85,000 each customer holds with each bank or building society.
9. The rules of the FSCS may change and the FSCS may take a different approach on the application of these rules to a particular bank or building society depending on the circumstances of the failure of that bank or building society to pay back what it owes. Investors can find out more about the FSCS (including amounts and eligibility to claim) by visiting its website www.FSCS.org.uk or calling 0800 678 1100.
Legal & General's Head of Business Development, James Harrington said, "Although the rate of inflation has fallen back slightly in recent weeks savers are aware that the gap between interest rates and the retail prices index (RPI) continues to present an inflation risk to their capital. The Bank of England Inflation attitude survey* published last month revealed that people expect the level of inflation to still be at 3.5% in five years time. If that happens the purchasing power of their savings would be reduce to less than 85% of today's value.
Our inflation protected deposit bond reduces this risk with its RPI link and provides growth even if inflation falls over the next five years. Investors in IPDB 2 receive a fixed minimum return of 16.0% (3.01% AER), or a payment linked to RPI, whichever is greater at the end of the five year term. Plus there is the added bonus that the deposit bond aims to return their initial capital at maturity.
Our first inflation protected bond offer proved extremely attractive to a wide range of investors. We think that our new inflation protected bond will also appeal to savers who are concerned that low interest rates combined with continued high inflation will reduce the real value of their savings over time."
The end of the five year fixed term is 22 March 2017. If investors take out some or all of their money before the end of the fixed term they may get back substantially less than they originally invested.
The minimum investment is £500 and the Bond is available as a deposit plan (for individuals, pension trustees, charities and corporate applications), new cash ISA applications (up to a maximum of £5,340) and for cash ISA transfers for which there is no maximum. The last date for ISA transfers is 17 February 2012 to allow time for completion of the transfer before the offer close date. The closing date for all other applications is 2 March 2012.
Commission is 2.5% of the sum invested. Full details for this product are available on the Legal & General dedicated website www.landgstructuredproducts.com.
Advisers can also contact Adviser Direct on 0845 273 0008 (Lines are open from 9am to 5pm Monday to Friday. We may record and monitor calls. Call charges will vary). Or email structured.team@landg.com
*Note: Source - the Bank of England quarterly survey of public attitudes to inflation, undertaken in November 2011, published on 15 December 2011
Notes to editors The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.
1. The contract start date is 22 March 2012 and the end of the fixed term is 22 March 2017. The maturity payment date is 24 March 2017 (note = payment to Legal & General).
2. This is a limited offer and may be subject to change and early termination at the discretion of Legal & General according to market conditions, without notice.
3. This plan is not suitable for customers who may need to access their money before the end of the five year term or who may be seeking a definite return.
4. The growth of the Retail Price Index will be measured between the January 2012 Retail Prices Index level and the January 2017 Retail Prices Index level.
5. The Inflation Protected Deposit Bond 2 is designed to return the original investment at the end of the fixed term. If investors take out some or all of their money before the end of the fixed term, they may get back substantially less than they originally invested.
6. Taxation - as this is a deposit investment any growth received is treated as interest. The cash ISA (and an ISA transfer) is a tax free investment. Any growth received through the deposit plan will be paid net of UK income tax at the basic rate (currently 20%). Non tax payers can reclaim this tax. Higher and additional rate tax payers will have further tax to pay. SIPP, SSAS, charity or company applicants can be paid without the deduction of income tax but only where sufficient documentary evidence is provided.
7. The Deposit taker is The Royal Bank of Scotland Plc (RBS).
8. The return on the original investment and any applicable returns are dependent on RBS paying this money to us. This might not happen if RBS default or become insolvent and unable to repay us this money. If they don't repay us, the investor could lose some or all of their original investment. RBS is a member of the Financial Services Compensation Scheme, which covers the first £85,000 each customer holds with each bank or building society.
9. The rules of the FSCS may change and the FSCS may take a different approach on the application of these rules to a particular bank or building society depending on the circumstances of the failure of that bank or building society to pay back what it owes. Investors can find out more about the FSCS (including amounts and eligibility to claim) by visiting its website www.FSCS.org.uk or calling 0800 678 1100.
For more information please contact:
Mike Connolly
PR Manager Savings
PR Manager Savings
t: +44 (0) 1737 375365
m: +44 (0) 7802 503917
e:mike.j.connolly@landg.com
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