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.
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
21 November 2014 06:44 PM
Your children have it all, your partner gets nothing
21 November 2014 07:12 PM
Halfords is gearing up for Christmas
21 November 2014 06:54 PM
Fields of dreams: venture capital trusts help young companies to grow, potentially delivering big returns for investors
21 November 2014 06:32 PM
There are many reasons for people to turn to high-cost credit, but being turned down by their banks for a loan is one
21 November 2014 07:15 PM
The £150 incentive from Yorkshire and Clydesdale runs from now until 28 February next year, but you must use the official Current Account Switching Service (CASS) and close your existing account to qualify
14 November 2014 04:42 PM
For the rising number of homeless women, the struggle is compounded by health problems and by losing their children
14 November 2014 05:37 PM
Research from Sainsbury’s Bank Credit Cards this week revealed that 15 per cent of people making a large purchase on their plastic didn’t use one with 0 per cent interest on purchases
14 November 2014 05:23 PM
Last week was hangover time, when Stock Spirits, a vodka producer, distilled a profit warning that sent its shares crashing more than 25 per cent
14 November 2014 05:17 PM
Investment melting pot: the price of gold may have fallen but Artemis Strategic Assets believes its value cannot be debased
14 November 2014 05:05 PM
Interest rates are currently as low as 0.1 per cent
14 November 2014 05:01 PM
The energy watchdog Ofgem has slammed Scottish Power, while Citizens Advice reports a string of complaints about it
Weekly Money: Round-up of the personal finance stories you may have missed 24-28 November
You'll need £220,000 for a minimum wage in your retirement
Simon Read: There may be trouble ahead for cohabiting couples who don’t make a will
Money Insider: Would £150 make you switch banks?
Bargain Hunter: Find the deals that have real value beneath the Black Friday hype
- 1 Jennifer Lawrence scores first UK top 40 single with Hunger Games track 'The Hanging Tree'
- 2 Shia LaBeouf claims he was raped during #IAMSORRY art installation performance
- 3 'You should come to my house and eat cheeses with me': 4-year-old sends adorable love letter to girl at school
- 4 Scientists predict green energy revolution after incredible new graphene discoveries
- 5 Michael Buerk wishes he killed Jimmy Savile when he had the chance - by pushing him overboard a cruise ship
Obama: The only people with the right to object to immigration are Native Americans
Ukip says babies born to immigrants in the UK should be classed as migrants – which would include Nigel Farage’s own children
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Ukip mocked after mistaking Westminster Cathedral – for a mosque
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
David Cameron sets out immigration reforms: We should distrust Ukip and their 'snake-oil of simple solutions'
iJobs Money & Business
Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...
£Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...
£Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...
£90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...
Day In a Page
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