There are now 1,200 PEPs to choose from, 200 more than last year, according to the 1996 PEP Guide, published last week by financial adviser Chase de Vere Investments.
There are more than 100 of a new breed of high-income, lower-risk PEP which invests in bonds rather than shares and which is aimed at investors wanting to take an income from their savings, according to the guide. Other broad categories for savers to choose between include PEPs for investors wanting growth, those where investments are managed for you, those where you manage your own portfolio, and low-cost PEPs for the shares of just one company.
Chase de Vere's PEP Guide, which is probably the most comprehensive available, could provide a steer for people planning to buy a PEP from the bewildering array now available.
A boom in tax-free stock market investment is predicted over the next few months, with perhaps 450,000 savers investing more than pounds 1bn in PEPs, according to research for Morgan Grenfell, a leading PEP provider.
PEP purchases tend to be skewed towards the first few months of the year because of the expiry of annual PEP allowances on 5 April, at the end of the tax year.
You can invest up to pounds 6,000 in a PEP containing unit or investment trusts or a number of stocks and shares, and a further pounds 3,000 in the shares of a single company. These allowances are available every tax year, but companies gear up their promotional efforts to get people to use each year's tax breaks before the April deadline.
Earlier this month, two investment companies, Legal & General and Fidelity, started a new price war by crossing swords on which could offer the cheapest stock market PEP (Legal & General's is).
Chase de Vere's guide was published too late to contain these latest price cuts, but the firm notes that PEP prices have come down generally. It says: "With investors looking for a home for the interest earned on Tessas and charge-cutting widespread, we anticipate phenomenal levels of PEP investment in the first quarter of 1996."
The PEP Guide details the charges and features of various PEPs, and gives figures for past performance. It notes the average PEP investing in a unit trust has given investment returns of 53 per cent over the past three years - an average of 15 per cent a year, against just 14 per cent in total over the three years from the building society.
The guide costs pounds 12.95. But if you subsequently buy a PEP through Chase de Vere - even one that does not earn the firm any commission - that pounds 12.95 is refundable. The firm will give advice on PEPs.
Alternatively the guide could provide useful comparisons for investors who want to choose their own PEPs and then buy through a discount broker such as the London-based Chelsea Financial Services to get a refund of some of any commission.
q Chase de Vere Investments, 0800 526092.