PEP (personal equity plan)

elizw

I have had a PEP for 10 years invested in Marks and Spencer Shares held by a stockbroker. Should I stay or should I go - Are the charges costing more than the benefits. What benefits are there now?

grumbler

I am not an expert. See this interactive Chart . Price is about the same as 10 years ago :eek: , but rising. I think experts will add something about dividends.

cheerfulcat

PEPs are still worth holding on to for the tax free status of the investment. You can change the holdings in the PEP if you like; it is more or less the same as an ISA now. If you have no other shares then holding just one is risky compared to holding a portfolio; you could consider selling the shares and buying a fund instead. Alternatively, if you are sufficiently interested/motivated, and there is enough money in the PEP, you could consider exchanging some of the M&S shares for a few different ones.

As grumbler says, there should have been regular dividend payments along the line which, if they were reinvested, should have boosted the performance of your PEP.

Whether the charges are costing more than the benefits are worth is up to you to decide but you can always move to another broker - Squaregain charges just £25 for any amount of PEPs and ISAs held with them.

HTH

Cheerfulcat

elizw

thanks for replying about my PEP - I do have other investments in m and g funds and privateisation shares - but this is what is worring me most as I seem to have no control over it. the broker is holding all the dividend payments in cash without informing me of the interest rate I am getting - I have asked but he didnt know. i asked sometime ago about reinvesting the dividends but nothing happened - I like M and S and am happy to keep the shares. They are worth about £5,000 and the cash is about £1200 - but what is the best thing to do

david78

You should think about transfering your M&S share PEP to a discount broker like Hargreaves Lansdown (there are others like Squaregain). You can hold M&S shares if you want, or switch them into another company or fund, now or at any time in the future.

It sounds like you have what was formally a single company PEP, but it doesn't matter because you are allowed to transfer these to General PEPs.

Your other investments could be transfered too (though outside the PEP wrapper).

You should be able to get complete control over your investments, including on-line dealing and valuations, dividend re-investment and interest on cash held.

I would imagine it would take only 1/2 hour fill in the form necessary to transfer.

cheerfulcat

elizw wrote:

the broker is holding all the dividend payments in cash without informing me of the interest rate I am getting - I have asked but he didnt know. i asked sometime ago about reinvesting the dividends but nothing happened

elizw, TBH that would make me a little uneasy. I would be very inclined to change brokers if mine wouldn't or couldn't tell me the interest rate applied to cash in the account, and ignored instructions to reinvest dividends.

david78

Can you name the existing broker?

elizw

thanks guys - best not name them - but they are big - i just dont trust anyone to give impartial advice anymore - everyone is out to get your money - thats why i feel i want to remove it from the broker - but worried about losing the tax free status. Do M and S hold PEPs with their shares in them. If so would that be a good move.

EdInvestor

I would suggest you centralise everything in one spot, eg at Squaregain

How to open an account

They will normally pay the costs of transferring over shares.

elizw

I am STILL struggling with this - I have again requested the interest rate on the cash in my PEP along with withdrawing £500 to put into something else - and again they have ignored me - how rude is that! - I am paying £40 per year in charges and note that I can pay £25 elsewhere - but I am seriously considering taking the shares out of the PEP just so I can have more control over it. Thing is on shares worth £5000 and paying £40 or even £25 - am I saving that much on tax - I am really not sure of the tax position - do you pay ANY tax on dividends or is it 10% or something - sorry to be a pain to you helpful people - also how do I take it out of the PEP if I want to - do I just write to them and request it and will they charge me then for doing it - and if I want to transfer it to another PEP holder - will they charge me for that too? thanks for any info.

Debt_Free_Chick

elizw wrote:

I am seriously considering taking the shares out of the PEP just so I can have more control over it.

But if you read the other replies, you will see that this is not necessary. You just need to change your broker/PEP provider - you don't need to sell and you don't need to ditch the PEP.