Sudden upswing pushes PEP sales to new high

A last-minute surge of investments during the few days before the end of the 1996-97 tax year helped sales of PEPs reach record heights, according to figures released yesterday by the Association of Unit Trusts and Investment Funds (Autif).

Net PEP sales reached pounds 6.2bn in the year to April, up 44 per cent on the previous 12 months, Autif said. Net PEP sales in the first quarter of this year reached pounds 1.9bn, below the record pounds 2bn figure for sales during the second quarter of last year.

However, a final flood of pounds 797m into unit trust PEPs in the first few days of April helped push the annual total to its record high.

Philip Warland, director general at Autif, said: "PEP sales continue to reach new heights. Sales just for March were on a par with the total for the whole of 1992. The growth in the number of regular savings plan holders shows that the use of unit trusts is becoming part of the nation's savings habits.

"Investors need transparent, simple investment products with good performance and unit trust PEPs are able to match these needs perfectly."

The sudden upswing in sales followed concern among fund managers that despite a massive advertising push in the weeks prior to the 5 April tax deadline, investors were refusing to commit themselves to equity investments.

Fears over US interest rate rises and their potential impact on US and UK equity markets were cited as reasons for investors' reluctance to commit themselves. The looming general election was also said to have caused the initial go-slow.

However, a last-minute sales push helped convince many that direct equity investment was the long-term answer to safer but low interest rates.

Net retail sales of pounds 1.075bn, those bought by small investors, more than doubled in March from pounds 483m in February. They also rose from pounds 1.025bn in March 1996.

By contrast, however, unit trust sales to institutions dropped pounds 596m to barely pounds 300m in March, compared to the near pounds 900m in sales recorded the previous month. Some 40 per cent of that went into the international growth sector, while there was a net outflow of pounds 45m from European funds.

Autif said yesterday that a significant slice of sales in March were in the UK growth and UK growth and income sectors, of which company sales forces contributed pounds 122m and independent financial advisers almost doubled their previous record to pounds 75m.

However, funds which track the performance of the FTSE 100 or All-Share indexes took 76 per cent of the pounds 204m poured into the growth and income sector, confirming the growing dominance of cheap PEPs sold over the telephone by a growing number of companies, including Virgin.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Guru Careers: Account Manager / Membership Manager

£35 - 38k + Benefits & Bonus: Guru Careers: We are seeking an Account Manager ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

Guru Careers: Associate Director

£50 - 80k: Guru Careers: We are seeking an Associate Director for the Markets ...

Guru Careers: Associate Director / Director of Sound Practices

£60 - 100k: Guru Careers: Our client is looking for an Associate Director of S...

Day In a Page

Giants Club: After wholesale butchery of Idi Amin's regime, Uganda’s giants flourish once again

Uganda's giants are flourishing once again

After the wholesale butchery of Idi Amin's regime, elephant populations are finally recovering
The London: After 350 years, the riddle of Britain's exploding fleet is finally solved

After 350 years, the riddle of Britain's exploding fleet is finally solved

Archaeologists will recover a crucial item from the wreck of the London which could help shed more light on what happened in the vessel's final seconds
Airbus has patented a jet that could fly from London to New York in one hour

Airbus has patented a jet that could fly from London to New York in one hour

The invention involves turbojets and ramjets - a type of jet engine - and a rocket motor
10 best sun creams for kids

10 best sun creams for kids

Protect delicate and sensitive skin with products specially formulated for little ones
Tate Sensorium: New exhibition at Tate Britain invites art lovers to taste, smell and hear art

Tate Sensorium

New exhibition at Tate Britain invites art lovers to taste, smell and hear art
Ashes 2015: Nice guy Steven Finn is making up for lost time – and quickly

Nice guy Finn is making up for lost time – and quickly

He was man-of-the-match in the third Test following his recall to the England side
Ashes 2015: Remember Ashton Agar? The No 11 that nearly toppled England

Remember Ashton Agar?

The No 11 that nearly toppled England
Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks