Charges

Article Abstract:

Charges for UK personal equity plans (Peps) have been reported as price competition appears to have intensified. There is also a debate as to whether charges should come from income or capital. Charges vary according to whether investors choose unit trusts, investment trusts or direct investment. Unit trust Peps should not cost more than ordinary unit trusts, though there may be an extra charge for investment trusts used as Peps. Direct investment may involve higher charges and it may not be worth reinvesting dividends.

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Cashing in on Pep allowances

Article Abstract:

UK investors can hold cash as part of a personal equity plan (Pep) if they are seeking to use allowances for the 1994-1995 FY but do not want to invest in securities. This can be done through self-select Peps and through schemes offered by some companies such as Perpetual. Not all investment managers offer Peps cash facilities, and some argue that there is insufficient demand. The UK tax authorities set no time limits on investors holding cash, but investors should not test this by exceeding a 12 month period.

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Regular savings rip-off

Article Abstract:

UK investors saving through regular monthly payments into a personal equity plan (Pep) often pay higher charges than those saving through lump sums. Some low-cost tracker Peps do not offer regular savings schemes, while others levy extra charges which can have a major impact on the performance of the investment. There are other disadvantages to regular savings plans, such as not benefiting so much from compound interest as savers using lump sum savings schemes.

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