PEP investors do not tend to switch their money around after they have made their initial investment. People who have invested the full amount each year since the plans were introduced in 1987 could now have a PEP holding worth pounds 50,000.
Skandia's Multipep invests in the funds of 12 unit trust managers - 30 trusts in total. The funds include UK, overseas, green and UK fixed interest funds.
Skandia charges an additional 0.5 percentage point annual management charge on top of the underlying unit trust annual management charge of up to 1.5 per cent. The only initial charge is 5 per cent. However, if the investor switches between the funds of one company, they will get a discount. Transfers will cost between 0.25 per cent and 0.5 per cent.
Switching pounds 6,000 under the Multipep will cost on average pounds 63 compared to pounds 150 for transferring between two of M&G's funds.
On funds that pay a dividend, the Multipep carries extra charges in the form of a fixed dividend collection fee of between pounds 2 and pounds 5 per fund per year. The charge would increase the annual charge on pounds 6,000 invested in the income option by 0.18 per cent.Reuse content