Guide shows the way in the great PEP bazaar
Sunday 14 January 1996
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.
- 1 Australia to impose 24-hour curfew on all cats to protect endangered species
- 2 Model's video shoot on the beach interrupted by sudden landing of a group of illegal migrants
- 3 The difference between a psychopath and a sociopath
- 4 MH370: Boeing 777 wing that could match missing plane found on the French island of Reunion
- 5 'Killer robots' with AI must be banned, urge Stephen Hawking, Noam Chomsky and thousands of others in open letter
Kate Winslet thanked 'particularly horrible' girl who bullied her at school after Titanic success
Israel accused of killing 75 children during day of 'carnage' and war crimes in Gaza war
Australia to impose 24-hour curfew on all cats to protect endangered species
Walter Palmer: Cecil the lion killer revealed to be American dentist
MH370: Boeing 777 wing that could match missing plane found on the French island of Reunion
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn – or a return to a Labour government
Labour leadership contender Jeremy Corbyn says 'we can learn a great deal from Karl Marx'
I am the Jeremy Corbyn supporter that many will tell you doesn't exist
Public anger after French sunbather beaten up by gang for wearing a bikini in Reims park
Labour leadership: New poll shows party is now even 'less electable' than under Ed Miliband
Labour leadership contest: I would never quit the party, says Liz Kendall
iJobs Money & Business
£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250...
£45 - £55k DOE: Guru Careers: A Financial Controller is required to join a suc...
£12500 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...