View more on these topics

£1bn Pep bonanza as Brown boosts ISA

Fund managers are predicting a Pep bonanza of up to £1bn in the next three weeks following Chancellor Gordon Brown&#39s decision to overhaul plans radically for the Individual Savings Account.

Under the new rules, all Peps held at April 5, 1999 will keep their tax advantages and not have to be transferred into the new ISA.

The rules are a major U-turn on the proposals published by the Treasury last December which would have made Pep investments count towards a £50,000 lifetime limit for ISAs.

The ISA will now have no lifetime limit but will be limited to £5,000 a year for 10 years.

Investors will receive a further bonus in the first year of ISAs – contributions of up to £7,000, including £3,000 in cash, will be allowed.

Fund managers are claiming that investors will flood into Peps following Brown&#39s decision to safeguard Pep benefits and scrap the ISA lifetime limit.

Royal & Sun Alliance estimates that more than 700,000 people have held back from investing in Peps because of uncertainty over ISAs.

The company expects about £770m to be pumped into Peps in the remaining three weeks of this tax year.

The Treasury had estimated that 350,000 investors would have been hit by a £50,000 lifetime cap.

Clark Conway managing director Alastair Conway says: "If you have £6,000 to invest, do it now. Plan to Pep this year and next."

M&G director of communications Rachel Medill says: "Certainly, it removes all the worry from investing this tax year and next year. It will have a big effect on Pep sales."

Schroder Unit Trusts marketing director Bridget Cleverlysays: "We were most ple- ased for us, the investors and IFAs that the £50,000 limit has disappeared.

"It will remove a lot of uncertainty with Peps."


Costs of regulation

Am I seeing news management in action or what? The headlines seem to applaud the PIA for freezing regulatory costs for members and we are meant to be eternally grateful for this small mercy. But has anyone looked behind the scenes at the sleight of hand that has been performed? The overall costs associated with […]

Standard to pay commission on deposit account

Standard Life Bank is to offer the first deposit account paying commission to IFAs. The bank, which launches on January 5, will pay IFAs a cash equivalent of 0.2 per cent of deposits for six months. The commission rate will then drop to 0.1 per cent. The move is a bid to create a major […]

US stockbroker to set up 400 IFA branches in UK

Company directors and IFAs found guilty of dragging their heals over the pension misselling review will be kicked out of the industry under tough new Treasury plans. Treasury economic secretary Helen Liddell, in her latest attempt to keep the pensions review high on the political agenda, revealed that individual directors, managers and sales staff could […]

Pru venture capital arm touted as Cunard buyer

Prudential&#39s venture capital arm PPM Ventures is staying tightlipped over reports that it is negotiating to buy the cruise liner company Cunard. PPM Ventures, which specialises in management buyouts of unquoted companies, is rumoured to be looking to buy the company which has been losing money since its owner Trafalgar House was taken over by […]


Almost nine in 10 employers admit failings with post-DRA compliance

The default retirement age (DRA) was abolished more than three years ago, yet new research from Jelf Employee Benefits suggests that the vast majority of employers still have some way to go to fully understand, comply and communicate the landmark legislation change that prevents older employees being forcibly retired on the grounds of age alone.


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers. Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and thought leadership.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm