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Money: two sides: as the government would have you see them

Tuesday 02 December 1997 19:02 EST
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PEPman

Is a director for a soap multinational. Earns pounds 80,000 a year.

Has invested in PEPs since Nigel Lawson introduced them and never misses the chance to put his pounds 6,000 a year into a general PEP, plus pounds 3,000 into a single company plan. Since 1987, this works out at pounds 82,000.

Has also used his wife's PEP allowance, a further pounds 82,000. The couple's PEPs are now worth more than pounds 300,000.

He also put the full pounds 9,000 into a Tessa, which matured to a fund worth pounds 11,500 free of tax in 1996. Has since invested pounds 9,000 into a follow-on Tessa, maturing in 2001.

ISAwoman

Is a secretary at a publishing firm. Earns pounds 15,000 a year. Between March and October this year she was the sole breadwinner in the family.

She has pounds 200 in Premium Bonds. Until March, the family had pounds 800 in a building society account, then her husband lost his job. This is now down to pounds 157.60

They also had pounds 800 in a Tessa. That was cashed in, with loss of tax- free benefits, to pay for roof repairs on the house in September.

Her husband has now found casual work. She thinks she may have up to pounds 25 a month to save in the new ISA, as long as the kids don't want anything too expensive for Christmas.

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