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Advice on PEPs please

edited 30 November -1 at 12:00AM in ISAs & Tax-free Savings
6 replies 1.4K views
nsc_2nsc_2 Forumite
9 posts
edited 30 November -1 at 12:00AM in ISAs & Tax-free Savings
I've got some PEPs with AVIVA - Barclays Stockbrokers. To be honest, I don't really understand what they are :-/. I can't even remember exactly how I got them - probably as a result of a Building Society takeover, or something.

OK. So I'm a novice. Now back in June 2001, mid-market value was £4312, but by June 2002, that had fallen to £3143. June 2003 saw a further fall to £2445, but December 2003 saw a moderate recovery to £2705. June 2004 saw them at £3316, which is going in the right direction, but still a thousand down on where we started.

Quite simply, what do I do? ???

The current direction says 'stick in there', and perhaps 2002 and 2003 were trough years. Maybe the future augurs well. But honestly, I really don't know. I know I need to wait for the December statement.

But what are future projections for PEPs, especially this one?

I suppose it's to do with the performance of the stock market, which, I'm ashamed to admit, I don't really understand. :-[

So what should I do?

Replies

  • dunstonhdunstonh Forumite
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    It sounds like you have a self select PEP rather than a PEP that invests in managed funds.

    Self select PEPS allow you to choose the shares that are contained within them.  

    They are normally considered good for those that buy and sell individual company shares but want to avoid higher rate tax or capital gains tax.   You may have ended up with one as back in the windfall days you could PEP your free shares and avoid any capital gains tax. I did a lot of these and Norwich Union (Aviva) did issue windfall shares.

    They are as good as the share within the PEP.  The PEP is just a wrapper.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • isasmurfisasmurf Forumite
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    PEPs, or Personal Equity Plans, are the predecessor to Stocks & Shares ISAs. You have not been able to put any money into them since 1999.

    Generally the advice for PEPs is the same as it is for ISAs, that is unless you need the money keep it within the tax-free wrapper as once you taken it out of the PEP wrapper, that's it, a valuable tax free allowance gone forever.

    You can if you wish transfer the money in your PEP wrapper to other shares or bonds, but remembering to keep it all within the PEP. You don't have to stick with what you've got.
  • steady__eddiesteady__eddie Forumite
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    I have a self select PEP which I've had some fun with over the years but now I've lost interest (both figuratively and literally) since tax relief on dividends has been abolished, it used to pay for the charges. I have some shares in the PEP which are currently running at a paper loss Vodaphone, Iceland, Aviva are the current loss leaders) I was thinking about moving them out of the tax wrapper into my own name and then closing the PEP to save a couple of hundred quid a year in charges. Am I correct in thinking that if I do this, the purchase price of the shares will be the price at which they are transferred to my name and not the price which I paid for them when I bought them in the PEP ? The only alternative is to transfer to a cheaper PEP provider but I don't have the time to do the research nowadays.
  • dunstonhdunstonh Forumite
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    Its been a while since i looked at single company peps. Although i used to do a lot of them in the old demutualisation days.

    From memory i believe that you cannot transfer the shares to yourself as you no longer own them. You own the PEP.

    If you sell up, you get the share price on day/time of sale.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • MJSWMJSW Forumite
    171 posts
    Eddie, you can transfer shares out of PEPs (and ISAs) into your own name, although most managers make a charge for this (typically £10 per company) and some will levy an exit fee as well.

    For tax purposes, you are correct that you will be treated as acquiring the investments at the market value on the date of transfer. The PEP manager is legally obliged to inform you what this value is.
    The only alternative is to transfer to a cheaper PEP provider but I don't have the time to do the research nowadays.
    Comdirect would be much cheaper than a couple of hundred pounds a year. They charge a flat £50 per year, irrespective of the value of investments included. They will also refund up to £100 of fees charged by your previous manager for the transfer.
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  • steady__eddiesteady__eddie Forumite
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    Thank you for that info, my original PEP provider was taken over by Barclays, probably a very fine institution but I prefer to pay for the services which I use rather than a corporate image ! I'll have a look @ comdirect & sell the old flotation winners & see about transferring the rest. It's probably about time to start moving back into the market now anyway.
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