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.