WHAT IS A PEP? (Personal Equity Plan)

If you are one of the many thousands of investors who, during the 13 years that PEPs were in existence, contributed towards the many billions of pounds that were ploughed into them, then you need to read on.

The rules that applied to PEPs were restrictive when it came to constructing a balanced and diversified portfolio. A large proportion of whatever you invested in a PEP had to be held in either the UK or Europe. As a result, it is estimated that today the majority of all monies now held in PEPs are invested in UK funds. The fact that such a high percentage of private capital is invested in the UK means that these investments are totally at the mercy of the ups and downs of one stock market.

We can advise you on the best Personal equity plans (PEPs) to suit your needs

If you find yourself in this position, please talk to us so that we can discuss how you could rebalance your portfolio through a PEP transfer. Put simply, this is the movement of your funds from one PEP manager to another. Now, the much more flexible ISA rules on where investor capital can be invested also apply to PEP transfers. Therefore, if you want to transfer your PEP out of a UK or European sector fund into another market, there is nothing to stop you doing this.

The Treasury now also allows money you hold in single company PEPs to be bundled together with funds held in your general PEPs. This means that you can now move large sums from single to collective equity investments while still keeping them within a PEP, thereby reducing your exposure to risk.

Finally, let's not forget about partial PEP transfers. If your PEP is divided between a few funds - some good performers, others not - it's now possible to transfer out of the under-performing funds while retaining any investments that have paid off.
If you would like us to review your PEP holdings, please contact us by clicking onto the call me back option at the top of this page.

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