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You can find the current article at its original source at http://www.guardian.co.uk/money/2013/jul/20/midlands-together-retail-bond-triodos
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| Midlands Together retail bond offers up 14% returns | Midlands Together retail bond offers up 14% returns |
| (4 months later) | |
| If you're fed up with rubbish savings rates and able to stash away a sizeable sum, how would you feel about earning 14% a year on your cash? | If you're fed up with rubbish savings rates and able to stash away a sizeable sum, how would you feel about earning 14% a year on your cash? |
| A new investment opportunity launched this week is offering that eye-catching return to higher rate taxpayers, provided they are happy to tie up their money for five years and accept a level of risk. What's more, this is an ethical investment. The money raised will be used to provide employment opportunities to scores of former offenders, who will be renovating around 75 run-down empty homes in the West Midlands. | A new investment opportunity launched this week is offering that eye-catching return to higher rate taxpayers, provided they are happy to tie up their money for five years and accept a level of risk. What's more, this is an ethical investment. The money raised will be used to provide employment opportunities to scores of former offenders, who will be renovating around 75 run-down empty homes in the West Midlands. |
| This new scheme is a "retail bond" – a type of product issued by companies to raise money from private investors. It has been launched by an organisation called Midlands Together, in partnership with ethical bank Triodos. | This new scheme is a "retail bond" – a type of product issued by companies to raise money from private investors. It has been launched by an organisation called Midlands Together, in partnership with ethical bank Triodos. |
| Midlands Together is a newly formed "community interest company" that aims to provide paid work for ex-offenders and equip them with the skills to secure permanent employment. It is looking to raise £3m from the bond issue to enable it to buy empty homes, refurbish them and sell them at a profit, and at the same time invest more than £2m in paying, training and mentoring up to 150 ex-offenders over five years. Midlands Together is the sister company of Bristol Together, an award-winning social enterprise set up in 2011. | Midlands Together is a newly formed "community interest company" that aims to provide paid work for ex-offenders and equip them with the skills to secure permanent employment. It is looking to raise £3m from the bond issue to enable it to buy empty homes, refurbish them and sell them at a profit, and at the same time invest more than £2m in paying, training and mentoring up to 150 ex-offenders over five years. Midlands Together is the sister company of Bristol Together, an award-winning social enterprise set up in 2011. |
| If you buy a retail bond, you are buying a promise from that company that it will pay you a fixed level of interest each year for a set period, plus return 100% of your capital at the end of the term. | If you buy a retail bond, you are buying a promise from that company that it will pay you a fixed level of interest each year for a set period, plus return 100% of your capital at the end of the term. |
| The Midlands Together five-year bond has a minimum investment of £20,000, so this opportunity isn't for everyone. It offers an annual fixed return of 4% or 6%, depending on which version you go for; however, because the 6% bond is eligible for "community investment tax relief" (CITR), this pushes up the effective gross return to 14.3% and 15.1% respectively for 40% and 45% taxpayers, according to the prospectus. CITR is a government scheme providing tax breaks to those backing social enterprises in deprived communities. | The Midlands Together five-year bond has a minimum investment of £20,000, so this opportunity isn't for everyone. It offers an annual fixed return of 4% or 6%, depending on which version you go for; however, because the 6% bond is eligible for "community investment tax relief" (CITR), this pushes up the effective gross return to 14.3% and 15.1% respectively for 40% and 45% taxpayers, according to the prospectus. CITR is a government scheme providing tax breaks to those backing social enterprises in deprived communities. |
| The major risk is that these bonds are not covered by the Financial Services Compensation Scheme, so if Midlands Together was to go bust you would lose some or all of your money. Also, they are not traded on a recognised investment exchange, meaning investors can't access their capital during the five-year life of the bond. | The major risk is that these bonds are not covered by the Financial Services Compensation Scheme, so if Midlands Together was to go bust you would lose some or all of your money. Also, they are not traded on a recognised investment exchange, meaning investors can't access their capital during the five-year life of the bond. |