Around 1.8 million people said they were likely to invest in a 1996/97 PEP before the deadline, but a sizeable minority remained worried by Labour, according to a poll carried out for Templeton Investment Management.
Investors nervous about the election and its possible consequences could start investing overseas. That doesn't mean putting cash in dodgy tax shelters, but looking at the potential of high returns by investing in foreign markets.
Admittedly, you need to be a little more adventurous in your investment outlook, but if you've already got a portfolio of a reasonable size then it makes sense to diversify abroad. Of the pounds 6,000 which you can invest each year in a general PEP, up to pounds 1,500 can go into what are known as non-qualifying investments - those outside the European Union. This means the exciting world of global markets, from established countries such as America and Japan to emerging areas such as Malaysia andLatin America, is available for investment opportunities.
If you want to get the tax advantages of a PEP for your overseas investment, however, you must invest your pounds 1,500 in countries with stock exchanges which are recognised by the Inland Revenue. This means that countries such as Brazil and Mexico are in, while Chile and China are out.
If you're a reasonably novice investor, it may be much safer to stick to markets you understand. These days it's easy to add some extra spice to your PEP portfolio by using your non-qualifying investments allowance.
Several providers, including Fidelity, GT and Prolific, have set up package deals for you to get abroad easily. Of course, you don't have to limit yourself to investing in funds within a PEP. The returns on an investment in an overseas unit trust could far outweigh the lost tax benefits of not being able to shelter your investment in a PEP.
Picking an overseas market is a difficult choice. If you think political conditions in the UK are turbulent, look at Latin America. One of the world's traditional political hot spots, the continent is famed for dictatorships, revolutions and internal strife - and often the only financial certainty is that corruption is rife.
It is a background which has seen rampaging inflation, most notably in Brazil where, in the past three decades, inflation has frequently been measured in hundreds or even thousands of percentage points.
It is not an area for the nervous investor. On the other hand, you probably don't want to miss out on the potential. An international growth fund could give you exposure in many different international markets. There are around 200 international growth funds from which to choose.
The top performers over five years are Prolific Technology, Save & Prosper Growth, and Britannia International Special Opportunities. Two of these funds are specialist funds which require a greater degree of confidence. But most fund managers will have a general fund investing in international growth.
Of course, you could go closer to home and just look at European opportunities. But it would seem to shame to make the move beyond these shores without exploring the wider world of investment opportunities.Reuse content