Personal equity plan or PEP
A PEP is a way of investing in certain types of securities on a tax free
basis. Through PEPs you can invest in shares, unit trusts or investment trusts
where all the proceeds are currently free of income and capital gains tax.
Depending on which lender you have, you can use PEP's to repay interest only
The Government however announced in 1997 their intention to launch Individual
Saving Accounts (ISA's) from April 1999 to build upon the experience of PEP's
and TESSA's. They did allow existing PEP's to continue after April 1999 but you
were not allowed to continue investing more money into them. This should not
affect them as suitable repayment vehicles for the growth they are capable of
achieving over the term of the debt.