Why transfer a PEP or ISA Investment?

There are a number of reasons why investors might choose to transfer their PEP or an existing ISA:

Diversify your tax-free investments

A raft of rule changes introduced by the Treasury in 2001 included the removal of the distinction between 'single company' PEPs (invested in the shares of just one company) and 'general 'PEPs (which can be made up of investment trusts, shares, unit trusts etc). This was good news for the holders of the nearly 3 million single company PEPs who invested more than £48m between 1992 and 1998⁽¹⁾, as these investments can now be transferred into a broader-based fund, or selection of funds. This could be particularly important for investors who are uncomfortable with the risks associated with investing in the shares of a single company.

Your investment needs have changed

Many PEP investors' personal and financial circumstances will have changed a great deal since their initial investment, and they may now have very different requirements. In fact it was these people the Treasury wanted to benefit from the rule changes and increased flexibility. For example, as an investor you might have taken out your PEP with the intention of saving for the future, so growth would have been your investment objective. Now, many years later, you may require income from your investment, perhaps making your initial fund choice no longer suitable for you. Other changes introduced in 2001 also lifted certain restrictions regarding which asset classes PEPs could and could not invest in. These rule changes mean that PEP investors have the opportunity to invest a larger percentage on a world-wide basis and in speciality sectors, such as Traded Endowment Policy Trusts and the AA-rated North American Fund.

Simplify your PEP and ISA savings

We've found that many of our investors have managed to build up often quite substantial portfolios of PEP and ISA investments, frequently with a range of different investment managers. This can make it difficult and time-consuming to keep track of how your tax-free investments are performing, often with countless statements arriving from different providers at different times of the year. At Allianz Dresdner, we try to keep investments simple and easy to understand. By consolidating your PEPs and ISAs to a single plan manager (such as the Allianz Global Investors Investment Trust PEP), you can enjoy the peace of mind of having an award-winning manager and your investments under one roof.

⁽¹⁾ Source: PIMA.