PEP survey: How to find an exit

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The Independent Online
The reasons for disenchantment with a particular PEP can vary from sloppy and inefficient PEP managers to under-performing investments. In either event, you may decide a move to another PEP manager is necessary.

Changing your PEP manager can be a long-winded and expensive business. But a little patience is usually enough to get the right results. That means resisting the temptation to sell the PEP outright. Since you're rationed to just one PEP a year, selling it means losing that year's PEP together with its tax-free status.

PEP transfers must be handled by the new manager. Fill in their forms and then sit back. A month is about average to sort out the paperwork.

The big disadvantage of changing PEP managers is the likelihood of being hit by double charges, once from the manager you are leaving and once from the new one. Exit charges are sometimes fixed, as high as pounds 58.75 on Foreign & Colonial's investment trust PEP. Others charge a percentage of the PEP's funds under management, usually around 1 per cent. Some, like Guinness Flight Hambro, have now scrapped exit fees.

-Richard Shackleton

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