The dash to cash in on PEP allowances
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Your support makes all the difference.Like greyhounds out of their traps, UK fund managers are streaking towards the 5 April end-of-year tax deadline, hoping to pull billions of pounds of investors' money in their wake.
They are banking - literally - on the new-found attraction for personal equity plans in the wake of the Budget announcement that PEPs will not have to be rolled into the new Individual Savings Account, up to a pounds 50,000 limit, as first suggested.
The scale of cash pouring into PEPs in the dying days of this tax year is expected to reach almost pounds 1bn in the next week alone.
Richard Wastcoat, executive director at Fidelity Investments, says: "Since the Chancellor gave the green light to PEPs in last week's Budget, we have seen a flood of new business. We are receiving over 8,000 calls a day and predict that the industry will receive over 500,000 calls before 5 April."
Mr Wastcoat says his company is ready to handle more than 75,000 more calls between now and the end of this tax year. Fidelity is planning to keep its offices in Tonbridge (Kent) and Reigate (Surrey), open until the last minute - midnight on Sunday, 5 April.
Mercury Asset Management, another large provider, says it will accept applications for its PEPs until Saturday. Applications must reach its offices by post or they can be delivered by hand to its head office in London.
Other life offices are making similar arrangements. Among those expecting a last-minute PEP bonanza are the UK's growing band of discount brokers, who sell cheap products by discounting the cost of their commission back to customers.
Don Clark, at PEPDirect, a Wolverhampton-based telephone broker which charges pounds 25 per transaction, says his staff have been raking in more than pounds 1.5m a day into PEPs.
Amid the PEP-buying frenzy, however, it still pays to take care when selecting a product. Not only is the stock market a potentially risky investment, but the tax advantages of PEPs are not always the most important consideration for savers. If in any doubt, talk to an independent financial adviser (IFA) before investing.
For a list of three IFAs near you, call 0117 9711177.
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