Personal Equity Plans: Self-select: for the experienced only
Sunday 01 February 1998
But experienced investors who want to build up their own portfolio can do so with a self-select PEP. To do this, you still need a PEP manager to administer the scheme and deal with the Inland Revenue. Apart from this, it is up to you decide what investments go into the PEP, subject to the rules.
You can put up to pounds 6,000 in a general self-select PEP and pounds 3,000 into a single-company PEP in any one tax year. You can only invest in one company's shares in a single-company PEP. A general PEP can invest in unit trusts, investment trusts, open ended investment companies (Oeics), shares, corporate bonds and gilts.
"Self-select PEPs offer great flexibility and choice, but are only suitable for experienced investors," says Alastair Conway, managing director of Clark Conway, independent financial advisers. "These PEPs are only for those who want to buy individual shares and be proactive in the management of their portfolio. Around 99 per cent of our clients prefer to go down the managed PEP route."
Around 50 PEP managers, mainly stockbrokers and the stockbroking arms of the banks, offer self-select PEPs. Most can be run over the telephone. Typically, there is no initial charge for setting up the PEP, although a few do charge up to 3 per cent. But all have an annual management fee and impose dealing charges when you buy and sell investments. These vary a lot.
Usually there is a minimum investment required on self-select PEPs. While Sharelink requires pounds 250, others want you to invest pounds 1,000 or more.
Some PEPs offer a monthly investment facility, so you can save on a regular basis. If you take this route, check the minimum dealing fee as you do not want to end up paying pounds 15 in charges each month when you are only investing pounds 50 a month.
A number of PEP managers have a maximum dealing charge, which can be economical if you are buying large parcels of shares. As well as charges you should check what you can put in the self-select PEP. Bradford & Bingley offers a low-cost PEP with no initial charge, an annual fee of 0.5 per cent and a dealing charge of 0.25 per cent. But you can only put FT-SE 100 shares in the PEP. Shares are bought and sold once a week so this PEP is not suitable if you plan to be an active trader. Lloyds Bank's self-select PEP offers two dealing facilities: an instant, immediate service and a bulk-buying service. Immediate dealing costs are 1.5 per cent, and the bulk-buying service where shares are bought and sold once a fortnight, costs 0.5 per cent.
The immediate dealing charge on pounds 6,000 of shares in a single company would be capped at pounds 75, whereas if you used the bulk-buying service it would cost pounds 30. On top of this, there is the usual stamp duty to pay at 0.5 per cent when you buy any shares.
If you want to include unit trusts in your PEP, check whether the PEP manager will allow this.
Sharewise, a subsidiary of Skipton Building Society, operates a return- commission policy on unit trusts. For example, if you invest pounds 6,000 in M&G's 2nd General unit trust, there will be an initial fee of which 3 per cent, pounds 180, will be paid by M&G to Sharewise as commission for introducing the business.
"Instead of keeping this commission, Sharewise charges its standard dealing charge, and then passes back the commission to the customer. Its dealing charge on a pounds 6,000 investment is pounds 32 plus stamp duty, but the customer then receives a cheque from Sharewise for pounds 180, the rebated commission," a spokesman explains.
q Contacts: Bradford & Bingley, 01274 555700; Lloyds Bank, 0345 455565; Sharewise, 0113 2444095; Killik & Co, 0171-384 4400; Charles Stanley, 0171-739 8200; NatWest, 0171-895 5600; ShareLink, 0121 233 9955.
For a full list of PEP managers offering self-select PEPs and details of their charges, see Chase de Vere's latest PEP Guide which costs pounds 12.95 and is available on 0800 526092. For details of stockbrokers in your area contact the Association of Private Client Investment Managers and Stockbrokers on 0171-247 7080.
26 December 2014 02:32 PM
The coming year is expected to provide opportunities for patient investors
19 December 2014 07:30 PM
Simon Read: The point of having protection insurance? The right cover can help reduce your financial concerns at a time of extreme worry
19 December 2014 07:30 PM
In May Nicola Groves got a massive shock. The 45-year-old mother of two was told, bluntly, that she had breast cancer. "When I heard the words, 'You do have breast cancer and you are going to lose your breast', I felt as if time stood still," she says.
19 December 2014 07:30 PM
It's that time again when the media looks back over the past year and forward to the next. I am reminded of an old film, The Day the Earth Caught Fire (1961). Near the end of the film a newspaper prints two headlines – which one it uses will depend on whether the world is saved or doomed.
12 December 2014 05:42 PM
The supermarket banks have always excelled at offering simple, no nonsense products, and savings accounts is another area in which they fare well
12 December 2014 06:17 PM
The sun is shining on people who struggle to heat their homes and it’s thanks to a sense of community
12 December 2014 06:23 PM
Struggling people need help, understanding and forbearance, not ill-thought-out pronouncements
12 December 2014 06:20 PM
You won’t find me bashing the banks for the sake of it, but sadly they’ve deserved all the criticism that’s been sent their way in recent years
12 December 2014 06:02 PM
Gillian Guy, chief executive of Citizens Advice: 'The injustice of shock bills for crime victims must end. The Government must stand up for consumers and cap bills from lost or stolen phones at £50'
12 December 2014 05:57 PM
Stirring the pot: the Indian Government’s reforms of labour rules offer hope of a brighter future for businesses
12 December 2014 05:53 PM
Knight of the road, look out: you’ve got a new rival
06 December 2014 12:00 AM
Simon Read: The Chancellor has stamped on an unfair tax. But will the delight of homebuyers mean misery for others?
06 December 2014 12:00 AM
Were you surprised by the sudden reform of the rules for stamp duty on property purchases? I certainly was. I've been calling for ages for a change in the tax to make it more fair – and, at a stroke, George Osborne did just that on Wednesday in his Autumn Statement.
29 November 2014 12:00 AM
21 November 2014 04:33 PM
With some people are weighing up whether they will be better off cashing in their final salary pension next spring, Samantha Downes asks the experts
- 1 PlayStation and Xbox hacked by Lizard Squad
- 3 The Grace Dent Christmas Questionnaire
- 4 The 'Black Museum': After 150 years, public set to see exhibits from police’s grisly crime museum
- 5 Vagina canoe artist defends herself over ‘obscenity’ charges
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Katie Hopkins speaks out on childhood obesity: 'Parents of fat children should be prosecuted for child cruelty'
iJobs Money & Business
Not specified: Selby Jennings: VP/SVP Credit Quant Top tier investment bank i...
Not specified: Selby Jennings: Quantitative Research | Global Equity | New Yor...
Not specified: Selby Jennings: SVP Model Validation This top tiered investment...
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
Day In a Page
A three-bedroom villa with self-contained flat, minutes from Lake Windermere
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens