The trouble is, FCIT is not prepared to jump through the hoops necessary to allow it to accept investments from personal equity plans of more than pounds 1,500. Pepit will accept a few more restrictions on where it can invest and will therefore be able to accept the maximum PEP investment of pounds 6,000.
PEPS are one of the few areas in the field of private investment where there is any sign of life. And so far as it goes, Pepit is perfectly acceptable. Charges have been kept low. F&C is even trying to prevent Pepit trading at a discount to net assets by managing the new trust's share price. FCIT will take a pounds 10m stake in Pepit - about a third of the total F&C expects to raise - and will only sell its shares at prices above the issue price and asset value. This is to counter the argument that there is no point investing in a new trust because investors risk seeing their initial pounds 1,000 of cash turning into (say) pounds 900 of shares.
FCIT has shown itself to be an excellent starting point for investors interested in shares; hopefully Pepit will be just as successful. But the rules governing PEPS have been tinkered with in every Budget since they were introduced in 1986. The need to launch Pepit could shortly disappear. One wonders whether the launch is necessary.