As wealth managers see a gradual recovery in risk appetite, UK-based Meteor Asset Management has launched a new savings product linked to the FTSE 100 index of blue-chip stocks.

Meteor says its Guernsey-registered FTSE Income Plan has a six-year term, requiring a minimum investment of £10,000 or £7,200 for a tax-advantaged individual savings account wrapper. Barclays, the UK bank, is the counterparty for the product, Meteor said in a statement.

With official interest rates so low – the Bank of England official lending rate is just 0.5 per cent – many cash-like savings products are unattractive, particularly as investors may fear that their capital may be eroded if inflation rises, as some strategists predict. While the bankruptcy last autumn of US investment bank Lehman Brothers shook confidence in the structured products sector at the time - Lehman was a counter-party to such plans - firms such as Barclays Wealth continue to offer such products to the investment market.

Under Meteor’s plan, capital will be returned when the plan ends, so long as the FTSE 100 does not fall by more than half from the opening level at the close of any day’s trading during the investment term.

If the index does drop by more than 50 per cent and not recover to its starting level on 30 June 2015, capital will be cut by 1 per cent for each 1 per cent that the index finishes below its opening level, Meteor said. The product offers 7.0 per cent per annum or 0.574 a month.

“The markets continue to anticipate low interest rates for the foreseeable future and while this is a six year plan, nevertheless we believe that over that period investors will see a considerable net gain when compared with a High Street bank high interest deposit account,” Graham Devile, managing director at Meteor, said in the statement.

The closing date for the plan is 26 June 2009 and it carries an independent financial advisor commission of 3 per cent.