PEP and ISA reforms

From 6 April 2008, the Government have implemented a series of changes to the way that Individual Savings Accounts (ISAs) and Personal Equity Plans (PEPs) work. The key changes are as follows:

New Subscription Limits

Subscription limits were increased at the start of the new tax year. You are now able to subscribe up to £3,600 to a Cash ISA (previous limit £3,000) and £7,200 to a Stocks & Shares ISA (previous limit £7,000), subject to an overall total investment of £7,200 with all providers.

Mini and Maxi ISA

In an effort to simplify the structure of ISAs, the terms Mini ISA and Maxi ISA are no
longer valid in the new 2008/09 tax year.  Investors, may now subscribe either to a Cash ISA or a Stocks & Shares ISA.

PEPs become ISAs

On 6 April 2008, all existing PEP accounts automatically became Stocks and Shares ISAs and as such have become subject to ISA rules. You are still able to hold the same investments within your account, and because the PEP has converted into a Stocks & Shares ISA, the saver has the option to subscribe to the account, if they so wish.

Transfer of Cash ISA to Stocks & Shares ISA

Savers are also able to transfer some or all of the money saved in Cash ISAs to Stocks & Shares ISAs. This will not affect your annual ISA subscription allowance but please note that the rules do not allow for the transfer of cash from Stocks & Shares ISAs to Cash ISAs.

How does it benefit me?

Investors will benefit from these reforms in many ways. The structure of ISAs has been simplified to avoid confusion, increased subscription limits mean you can now save more money into the ISA wrapper (and protect it from the tax man!) and the transfer of Cash ISAs to Stocks & Shares ISAs means you can now unlock the potential of savings set aside in the building society over the last few years.

Killik & Co will pay any and all of your exit charges

Many people have accumulated PEPs and ISAs over the years - some with high charges, some of which have performed averagely or even poorly.

Killik & Co will pay any exit charges imposed by other managers if you transfer your plans to us.

Questions?

If you would like more information on the PEP and ISA reforms, please contact your Broker who will be happy to assist you.