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Our investment products can provide both individual and institutional investors with flexible investment vehicles, which can accommodate varying appetites for risk, asset exposure and capital protection.

It is important that you understand the risks attached to each of the investments. The key risk areas are summarised below, but please remember that these are general risks and those relevant to a particular product are set out in the product literature.

Meteor does not provide financial advice or guidance on tax issues and we recommend that you talk to a financial adviser if you are considering investing. Some products require you to seek professional financial advice. Such products will be highlighted on the website and in the brochure.

Any investment should only form part of your total investment portfolio. You should also maintain savings you can access immediately and without penalty to meet any emergency cash needs that may arise during the investment term.

Availability and Residence – due to local regulatory and legal requirements, not all products described on this website are available in all jurisdictions and some may be available on a limited basis only.

The securities mentioned on this website are not being offered, and will not be sold, within the United States or to, or for the account or benefit of, any U.S. person. The term U.S. person shall have the meaning as defined in Regulation S under the United States Securities Act of 1933 and includes, among other things, U.S. residents and U.S. corporations and partnerships.

Cancellation Risk – the risk that if you decide to cancel the investment after assets have been purchased you could lose some of your money if the market(s) or asset(s) to which your contract is linked have fallen since the purchase date.

Counterparty Risk   – the risk that a financial institution with whom we arrange the assets to provide investment returns does not, or cannot, pay the amounts due, which could cause you to lose some or all of your money and any investment returns that would have otherwise been payable.

Early Encashment Risk – the risk that if you decide to encash the investment before maturity you could get less back than you invested. Administration charges for early encashment will increase any losses.

Inflation Risk – the risk that inflation will reduce the real value of your investment over time.

Investment Risk – The risk that the market(s) or asset(s) to which your investment is linked fall in value, which could cause you to lose money.

ISA Transfer Risk – if you wish to transfer an existing ISA this must be done in cash, which means your existing ISA manager will sell your investments and you may be charged an exit or transfer fee. There is the potential for loss of income or growth if markets should rise while your transfer remains pending.

Liquidity Risk – the risk that you may not be able to immediately access the value of your investment.

Pricing Risk – the risk that a financial institution with whom underlying investments have been arranged may not be able to quote regular prices making it difficult to value your investment and delaying any early encashment request you may make.

Product Risk – the risk that the product design could produce a return that is lower than a direct investment in the market(s) or asset(s) to which the product is linked.

Tax Risk – The values of any tax reliefs will depend on your individual circumstances. You should note that the levels and bases of taxation could change in the future and these changes may be applied retrospectively.

It is important that you read any product literature carefully and in full so that you understand how the product works and can decide whether or not you are prepared to accept the risks and the possible consequences of investing in a particular contract, before proceeding with an investment.

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Other Updates

What are the new ISA rules for 2024/25 and how do they affect structured products?

Last year, Chancellor Jeremy Hunt, announced in the Autumn Statement new rules relating to Individual Savings Accounts (ISA), that would fundamentally change the way savers can invest into an ISA.

The New ISA rules for 2024/25

Last year, Chancellor Jeremy Hunt, announced in the Autumn Statement new rules relating to Individual Savings Accounts (ISA), that would fundamentally change the way savers can invest into an ISA.

In recent years, the rules on what type of ISA and how many an individual can apply for has been limited. Savers were allowed to invest new ISA money into one of each ISA type (Stocks & Shares, Cash, Lifetime, etc) per tax year so long as the combined total didn’t exceed £20,000. There are more nuances to this limit, with Lifetime ISAs (LISAs) limited to £4,000, however, for the purposes of the illustrations below, we will focus on two of the ISA accounts customers can open at Meteor1; Stocks & Shares, and Cash.

From 6th April 2024, the ISA rule changes mentioned in the Autumn Statement will come into effect and the biggest change of them all is undoubtedly the lifting of the limitation of how many new accounts savers can open in a given tax year. No longer, will savers be limited to one new account2 of each type per year. Now, under the new rules, a saver could hypothetically open as many accounts as they like with different providers, so long as the overall contributions do not exceed £20,000 in the tax year. This has been seen as a positive step that will provide savers the freedom to shop around for the best deal, without the added complication of transferring current year subscriptions. With some high street savings accounts offering rates above 5% (as of writing), we also expect many savers to look forward to potentially avoiding going over their personal savings allowance and getting taxed on savings interest by spreading their savings across multiple ISA accounts.

In the recent Spring Budget, the Chancellor announced the British ISA, a new type of ISA that will allow savers to invest an additional £5,000 in British companies on top of the existing £20,000 ISA limit. The government has already started consultation and this is expected to run until June. Until then, the full scope and rules of the British ISA are unknown.

Another key change to the ISA rules will be the increase of the age requirement for cash ISA applicants, from 16 to 18 years of age, bringing them in line with Stocks & Shares ISA accounts.

Before 6th April 2024

Savers limited to one new account of each ISA type per tax year. Max £20,000.

 

After 6th April 2024

Savers can open multiple ISAs each tax year so long as the combined amount doesn’t exceed £20,000.

How does this all affect Structured Products?

Almost all the structured products we offer, give investors the opportunity to protect their money from tax by investing via an ISA. At Meteor, our capital-at-risk plans are usually available within a Stocks & Shares ISA wrapper to investors, while our deposit plans are usually available within a Cash ISA wrapper. Investing in structured products within an ISA is a popular choice for investors as they get the benefit of potential enhanced returns versus high street savings, while avoiding potential capital gains tax or income tax on their investment returns.

Previously, those investors who had taken out a Stocks & Shares ISA in the current tax year elsewhere to invest in company shares, Open-ended Investment Companies (OEIC) or Unit Trusts would not have had the opportunity to then make an ISA application for one of our structured products (unless they opted to make an ISA transfer3). However, the new rules will allow investors to open as many new ISA accounts as they wish, so long as the combined total of the new subscriptions do not exceed £20,000 in that tax year. This means an investor who has the aforementioned ISA account with shares or OEIC holdings, can now continue to keep that account while opening a new ISA account with Meteor to invest in one of our many plans on offer.

There’s still time for 2023/24 ISAs

Until the new rules come into effect, investors still have time to utilise whatever remains of their current tax year ISA allowance by investing in one of our plans. Some of our plans also offer investors the ability to apply for their 2024/25 ISA account ahead of time. Be sure to check our Current Products page for plans that offer this.

Please note, Meteor does not offer investment or tax advice. The statements made in this article are factual to the best of our knowledge. Investors’ individual tax circumstances may differ and we recommend (and in some cases require) investors take investment advice before making an investment decision.

See https://www.gov.uk/individual-savings-accounts for more information.

The value of investments can go down as well as up. Investors could get back less than they invested.

Footnotes

1Meteor also provide customers with the ability to invest in Additional Permitted Subscription (APS) ISAs, however, for the purposes of this article, they have been excluded. We have also excluded, Lifetime ISAs (LISAs), Junior ISAs (JISAs) and Innovative Finance ISAs as Meteor do not offer these types of accounts.

2Historically, savers were able to open more than one new ISA account in a tax year, however, they would have been required to move all new ISA subscriptions for that tax year to the new account.

3The holdings of the ISA being transferred would have needed to be liquidated into cash, resulting in potential additional costs. The new rules will no longer require this, however, the ability to transfer current year holdings will remain, with the added benefit of partial transfers now being allowed.


Posted: 12 March 2024
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