Click below for the answers to the most asked PEP Questions.
What is a PEP?
From April 6th 2008, all PEP accounts will automatically be classed as Stocks & Shares ISAs.
PEP stands for Personal Equity Plan.
PEPs were a government incentive scheme to encourage investment in stocks and shares. PEPs are a tax-efficient ’wrapper’ that protects any gains or income from personal liability to capital gains and income tax.
In 1999, PEPs were replaced by Individual Savings Accounts (ISAs). Following the introduction of ISAs, you can no longer invest any new money in PEPs. However, you can still maintain your existing PEP invested in stocks and shares and continue to receive the tax efficient benefits of the scheme.
Can I buy a PEP?
Since ISAs replaced PEPs in 1999, you can no longer invest new money in a PEP.
Can I switch between funds?
Once you have re-registered your fund through SFS Invest Direct you will have an online account. You can then go online and sell shares in one fund and use the proceeds to buy shares in another within your PEP without losing any of your tax benefits. This is called switching.
Can I withdraw from my PEP?
You can make withdrawals from your PEP at any time without loss of tax relief. However, once you withdraw money you cannot make any further investments into your PEP as these products have now been replaced by ISAs.
What about the risks of investing in shares?
Stock market investments are subject to greater risk than, for example, a building society account and the initial capital and returns are not guaranteed. Consequently, if you are unhappy with the prospect of losing all or part of your capital you should not invest.
Generally, the level of investment risk and potential reward go hand in hand.
Can I transfer my existing PEP?
Most PEPs can be transferred, for further information click here.
I’ve read the guide but I’m still unsure, can you help?
If you are unsure about what to do with your PEP, please contact Skipton Financial Services to see whether it is worthwhile seeing one of our whole of market financial advisers. Please call 0800 137 832
