Gartmore cuts PEP charges

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GARTMORE has become the second big investment manager to cut charges on its personal equity plans, signalling a possible price war in the fund management business.

The initial charge on Gartmore's PEP will come down from 5 per cent to 2 per cent from next Monday. The company will introduce early withdrawal penalties of 3 per cent (plus VAT) for money taken out in the first complete tax year, 2 per cent in the second and 1 per cent in the third. The exit charges will be calculated on contributions made in the tax year rather than the value of the PEP at the time of withdrawal.

The annual management charge on a Gartmore unit trust PEP will remain at 1.5 per cent, plus VAT and the single company plan will be 1.25 per cent a year.

Gartmore's move comes just over a month after a similar move by Fidelity Investments.