Invest in a PEP - The Share Centre

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1 Invest in a PEP - The Share Centre Page 1 of 1 home > our services > for investors > pep > overview Back Print Page overview options how it works costs transfer The Share Centre DIY PEP is just the thing when you want to make the most of your PEP investments, as you choose when and where you invest. You can deal in a broad range of investments and there's straightforward, practical free advice from our plain-speaking experts, all designed to help you maximise your returns. The value to you of the PEP tax allowances will, of course, depend upon your individual circumstances, and you should bear in mind that the basis on which any allowance is applied and the level of any allowance can change. You can't put new money into a PEP as the scheme was superseded by the Individual Savings Account (ISA) in April 1999, but you can transfer an existing PEP from another plan manager or amalgamate separate PEPs into one easy-tomanage account. You'll find more information about how your DIY PEP works, and what it costs, by clicking on the tabs above. Of course, a DIY PEP won't be right for everyone, but the information in these pages will help to decide and we're on hand to answer any questions you may have. If after this you're not sure whether our PEP account is right for you we'd recommend you seek independent advice. Applying is easy just print your application form or request an application pack. And if you've any questions we're here to help: us or call from 08:00 to 18:00 Monday to Friday. The Share Centre is a member of the London Stock Exchange and is authorised and regulated by the Financial Services Authority and is entered in the register ( ) under reference Registered office: Oxford House, Oxford Road, Aylesbury, Buckinghamshire, HP21 8SZ. info@share.co.uk. Registered in England no VAT registration no Please read our RISK WARNINGS, TERMS OF BUSINESS & PRIVACY POLICY.

2 Invest in a PEP Options - The Share Centre Page 1 of 4 home > our services > for investors > pep > options Back Print Page overview options how it works costs transfer jump to The Trader option One account, many PEPs Managing your dividends Contract notes by Statements by Company reports Your DIY PEP makes it easy to take full advantage of your exisitng PEPS, with straightforward service, a wide range of investments to deal in (see Dealing options) and practical support, including free advice on UK shares. And we offer you various options, such as what you pay for dealing, whether you combine your various PEPs into one, or keep different tax years separate, what you do with your dividends, how you receive contract notes and regular valuation statements from us, and whether or not you want to receive a Company's Annual Report & Accounts. Not all of these options may be appropriate for everyone, so you'll want to decide which suit you and which don't. We're on hand to answer any questions you may have but if you're not sure which options are right for you we'd recommend you seek independent advice. You'll find more details below. The Trader option When it comes to dealing costs, what you pay to buy or sell investments depends on the value of the transaction. We don't ask you to deal frequently or set minimum investment amounts: how often you deal is entirely up to you. But if you are expecting to be trading quite actively you might want to choose the Trader option, where you pay a fixed amount for each transaction instead. You can buy or sell shares up to the value of 25,000 for a flat dealing commission of Deals over this size are charged at an additional 7.50 per 25,000 of value. The Trader option costs just 20 + VAT each quarter in advance, no matter how many accounts you've got. Which is best for you is likely to depend on how often you will be buying or selling investments, and what the value of each transaction will be. Use our Dealing charges calculator to help you decide which option suits you best. We appreciate it can be difficult to see in advance what your dealing pattern might be, so if you later find it's different from what you had anticipated, no problem. Simply ask us to switch you over to the more appropriate option. Equally, we understand you might want to set up a number of different accounts, or different types of accounts for different purposes, taking advantage of the ISA or Self-Invested Personal Pension schemes for example. So when you choose the Trader option it applies to all your accounts - whichever account you deal in, the same fixed

3 Invest in a PEP Options - The Share Centre Page 2 of 4 commission rate applies. When you're working out which option suits you best, do bear in mind transactions you might want to carry out across all your accounts. Equally, changes in the prices, and therefore value, of your shares might also affect your choice. You'll find full charges details under the 'Costs' tab. one account, many PEPs When PEPs were first introduced there were two types, General and Single Company. And often a new account would be opened for each tax year. Over the years the HM Revenue & Customs has made various changes to the rules, and the two classes of PEP have been merged into one, with a broader range of investments now allowed. Some people like to keep PEPs for different tax years separate, while others prefer to have all their PEP investments in one single account. There's no right or wrong way, it's whichever suits you best. So when you transfer PEPs to The Share Centre you decide how you want to operate them - one combined account or separate accounts for each year. Of course, arranging a transfer might also be a good time to review your current arrangements, and if you've a number of lower value PEP accounts it may be more cost effective to amalgamate them into one. Do bear in mind that, once you've amalgamated different tax years under one account we will not be able to separate them again, so if you wanted to transfer to another provider you would have to move the whole account. Just let us know on your application form how you want to hold your PEPs and we'll make the arrangements. Whichever you choose, your online account makes it easy to monitor your investments and to buy and sell what you want, when you want. managing your dividends The main source of income from your investments will be dividend payments on shares, or interest payments from Bonds or Gilts. Equally, if you keep cash in your account you'll receive credit interest from us each quarter. If you're investing to build up the value of your capital you may want to choose to have dividends and interest automatically re-invested every quarter. Because we carry this out for all our customers at the same time, you benefit from reduced commission, as described in 'costs'. Alternatively, you can leave your income in the account ready for you to invest when and where you want However, if you are investing for income, you may prefer to take your dividends paid out to you. Choose this option and we will automatically pay them into your bank account each quarter. If you're not sure which option is right for you we'd recommend you seek independent advice. When you choose to re-invest your dividends, and any other income such as interest on any cash balance in your account, you can: Invest into any individual share, so long as you already hold some of those shares in the account. You can change your re-investment instructions at any time but please allow at least 3 days before the next re-investment is due to take place so we can act on your new instructions. Generally the

4 Invest in a PEP Options - The Share Centre Page 3 of 4 quarterly re-investment takes place around the 5th of January, April, July and October. Invest into the share of the highest value in the account. You can tell us on your account application how you want income to be handled, then make any changes in the future simply by calling our Customer Service team with your instructions. contract notes by To keep right up to date with purchases or sales you've completed, ask us to send your contract notes by . Shortly after your order has been completed we'll you full details, including confirmation of which investments you have bought or sold, the price, dealing commission and other costs, such as stamp duty. You can set up this option from 'my profile' once you've signed in using your unique Customer Reference and PIN / Password. And if you change your mind at some point in the future simply alter your selection. statements by Each half-year we'll send you a statement showing all transactions completed during the previous six months, and a summary of your investments and their value. Many customers choose to receive this by , whether for convenience or perhaps to help reduce the amount of paper passing through their hands. And of course, providing your statement electronically reduces our costs, savings we can use to keep our charges as competitive as possible and to invest in improving our service to you. So if you prefer to have your statements electronically select the option in 'my profile' after signing in. company reports Some investors like to receive a printed copy of a company's Report & Accounts so, as part of our service, you can choose for us to arrange for you to receive these from companies whose shares you hold. To do so, simply call us with details of the Reports you want. For an even more convenient and faster way to review a company's Report you may be able to receive your copy electronically. Our Annual Report & Accounts service means you can get the latest available reports direct to your pc. Register for this free service and not only can you see the Reports from companies you invest in, but you can also look at those for other companies too. Not all companies subscribe to the Annual Report service and, for those that do, not all make their Reports available electronically. But our search function makes it easy for you to see if the information you want is available. And what's more, you'll see a against shares you hold in your accounts, or in your ShareWatch to show a Report is available through this service. The Share Centre is a member of the London Stock Exchange and is authorised and regulated by the Financial Services Authority and is entered in the register ( ) under reference Registered office: Oxford House, Oxford Road, Aylesbury, Buckinghamshire, HP21 8SZ.

5 Invest in a PEP Options - The Share Centre Page 4 of 4 info@share.co.uk. Registered in England no VAT registration no Please read our RISK WARNINGS, TERMS OF BUSINESS & PRIVACY POLICY.

6 Page 1 of 7 home > our services > for investors > pep > how it works Back Print Page overview options how it works costs transfer jump to Getting started Paying in Withdrawing money Buying shares Selling shares Price Limits Advanced limit types Extra features Managing your dividends Changes to your investments PEPs have been around since 1989, but the changes in 2001 were not picked up by many investors. Now, with a DIY PEP from The Share Centre you can give your PEP a fresh look, with access to a wide range of UK and overseas shares for taxefficient investing that is tailored to your personal aims. As a PEP holder already, you'll be aware that there's no capital gains tax (CGT) and any income tax payable has already been deducted, so even if you're a higher rate tax payer, you've nothing more to pay. And in most cases you don't even need to put details on your annual tax return, unless you receive and then withdraw more than 180pa of interest.. Of course, the precise value of these advantages to you will depend upon your individual circumstances, and the basis on which they are applied and the levels of allowances can change. You'll also recognise that the value of your PEP investments, and the income from them, can go down as well as up and so you may get back less than you originally invested. Underneath, your DIY PEP works along the same lines as our Share Account, giving you a straightforward way to buy and sell shares and other stock market investments. There are some restrictions imposed by the PEP rules, such as limitations on certain unit trust and OEICs, and the ineligibility of AIM and Ofex shares for instance, but our systems and processes help you to avoid the pitfalls, and we're on hand with answers to your questions and advice to help you pick the shares that are right for you. getting started Because PEPs are closed to new investors, you can't open a new one, but you can transfer to us an existing PEP from another provider. To do so, just select the 'open account' tab and you'll find everything you need. Do bear in mind that, during the transfer period, you will not be able to pay in to your account or make any sales or purchases. Equally, some providers will insist you sell investments and transfer your PEP as cash and this could mean a loss of income or growth following a rise in the market. Since share prices can change during the transfer period time, you could also find yourself at a disadvantage through not being able to deal on your account during this time. Your existing provider may also make a charge when you transfer. Once you're ready, return your completed application and transfer authority and we'll arrange the transfer and let you know as soon as your investments or cash balance has been received. We'll also provide you with an internet password and further account details. Because you choose the investments that go into your account, we do not offer

7 Page 2 of 7 you the right to withdraw your application prior to it being opened: so once you apply we'll open your account immediately. You do still, however, have the right to cancel your application within 14 days without affecting your ISA allowance for that tax year. Then, as an account holder you'll have direct access to our plain-speaking experts for practical advice on choosing the shares that are right for you. Once your new DIY PEP is up and running you'll be able to log-on and check the up-to-date value of your investments, monitor income on dividends, sales etc and buy and sell investments whenever you want. Your account has various in-built features to help you monitor and manage your investments more easily: set up separate accounts for different purposes, perhaps even to mirror investments you hold elsewhere keep an eye on companies whose shares you might be thinking of buying, by adding them to a ShareWatch account seek our Advice team's view on different companies - where we've published a view on shares you hold in your account; there's a direct link to their assessment call our Advice team to speak direct with our experts for everything from their latest views on individual shares to a complete review of all your stock market investments research shares direct from your account, with access to comprehensive information, news and opinion see how the value of your investments has changed since you bought them, with the profit/loss shown against each different investment get a free copy of our regular investment magazine, The Shareholder, packed with news, views and information, plus tips from our Advice team. receive a half-yearly account statement. All your investments are held in a 'nominee' name - Share Nominees Limited, a separate company within the Share plc group that exists purely to act as 'trustee' for customers' holdings. Being in nominee name enables us to act on your instructions, whether that's to sell your shares quickly and easily, or to handle other events, such as those described in 'Changes to your investments'. And of course, whichever name your investments are held in, you remain the beneficial owner. Naturally, they are safe and secure too and covered by the Financial Services Compensation Scheme. paying in As PEPs are closed to new investors, you are not able to pay in new money; however income from investments and the interest on any cash balance are added to your PEP.

8 Page 3 of 7 All the dividends received, proceeds of sales, withdrawals of cash and purchases of investments are detailed on a half-yearly statement of your account, sent to you in April and October each year. You can also view your account statement and transactions online at any time. withdrawing money Once you've withdrawn money from your PEP you aren't allowed under the PEP regulations to pay it back in. So, if you want to maximise the value of the tax benefits your PEP provides, our re-investment option might prove particularly useful. You'll find details under 'managing your dividends'. But if you've sold shares and want to withdraw money from your account, we'll normally pay it straight to your bank account. That way it's faster, easier and more convenient as you don't have to wait for a cheque to turn up and then pay it in to your bank. And income from your investments can be automatically paid to your bank account each quarter. If you do need a cheque we can send you one. For your security, cheques will always be payable to the account holder. There is a small charge for this service, although withdrawing income on a quarterly basis by direct transfer to your nominated bank account is free of charge. You'll find full details in 'Costs'. When you choose to have income from your investments paid out each quarter we'll add up all the dividends you receive in that period and credit them direct to your bank account. Alternatively, ask us to automatically re-invest that income to add to your existing investments; you'll find more details in 'managing your dividends'. buying shares and other investments Give us your purchase instructions online, direct from your account, and your order will be dealt straightaway. Or you can give us your dealing instructions by phone, post, fax or , and have your order handled along with those of other customers in one of 3 dealing sessions each day. When you buy unit trusts (including our Preferred Funds) the actual purchase will normally be made at noon. Our dealers will let you know if a different timescale applies. Online, you can place orders at any time for immediate dealing. You can also place an order outside market hours, to be dealt shortly after the market opens. And our dedicated dealing lines are available from 08:00 to 18:00 each day to take your dealing instructions. Our dealers aren't able to advise you, but you can speak to our Advice team about your purchase. Also, bear in mind when placing your order that shares do go up and down in value and, when you later come to sell them, you may get back less than you originally invested. And unless you've chosen fixed interest investments, the income you get from your investments can also vary. When you give us your purchase instructions we'll buy shares up to the amount of cash available in your account, including the value of any sales which have not yet settled. The stock market opens at 08:00 and closes at 16:30 each market day, so dealing instructions received outside these hours will be dealt shortly after the market re-opens. If you place an order when the market is closed, it is generally a good idea to set a price limit as share prices can fluctuate quite widely when the market opens.

9 Page 4 of 7 When dealing online you can choose whether to deal straightaway or wait to have your order dealt alongside those of other customers in our batch dealing sessions. Batch dealing starts at 2.50 for each purchase whereas realtime purchases start from So for smaller value purchases the batch option can be cheaper. You'll find full details in 'costs'. The batch sessions take place 3 times a day, from 09:00, 13:00 and 16:00, and when you choose this option you should be aware that, because your shares will be bought alongside those of other customers, the price you get may not be the same as when buying them immediately. The market may also quote a different price because of the larger number of shares being bought together. The price you pay could, therefore, be higher or lower than if your shares had been bought on their own. While the batch option gives you a lower commission level than the realtime option on purchases under 750, it does mean you will not know the exact price of the shares you've bought until later in the day. And if the share price is likely to move before the next batch dealing session you may want to weigh-up the cost saving against that potential change in the price. selling shares and other investments You can deal straightaway when you place your sale orders direct from your account online, or give us your dealing instructions by phone, post, fax or for dealing in the next batch dealing session. When you sell unit trusts (including our Preferred Funds) the actual sale will normally be made at noon. Our dealers will let you know if a different timescale applies. Our dedicated dealing lines are available from 08:00 to 18:00 each day. The stock market opens at 08:00 and closes at 16:30 each market day so dealing instructions received outside these hours will be dealt shortly after the market reopens. Our dealers aren't able to advise you on your sale, so do bear in mind when placing your order that the price may now be lower than you originally paid. When dealing online you can choose whether to deal straightaway or wait to have your order dealt alongside those of other customers in our batch dealing sessions. Either way, the minimum sale commission is 7.50, so you just need to decide when you want your deal to take place. You'll find full details in 'costs'. The batch sessions take place 3 times a day, from 09:00, 13:00 and 16:00, and when you choose this option you should be aware that, because your shares will be sold alongside those of other customers, the price you get may not be the same as when selling them immediately. The market may also quote a different price because of the larger number of shares being sold together. The price you get could, therefore, be lower or higher than if your shares had been sold on their own. price limits When you buy or sell shares you can choose to set a price limit. This ensures you only buy if the market price is no higher than the price you are prepared to pay, or you sell shares only if the market price is at least what you're prepared to sell them for.

10 Page 5 of 7 You can set a buying or selling price limit at the same time as you give us your dealing instructions. Whether you do this via our dealers or direct through your online account, there's no charge for monitoring these limits for up to 30 days. Price limits can be set for both immediate and 'batch' dealing, and you may renew or amend them as often as you need, free of charge. While sale or purchase price limits are the most popular type of limit used, there are more advanced limit types you can use, giving you tighter control over buying and selling shares. advanced limit types The basic 'price limit' options ensure that, when buying or selling shares, you only trade when you can do so at the price you've set, or better. Advanced options give you more control still over buying and selling your investments. Stop-Loss limits - to limit potential losses on a share you've just bought, or to protect gains on shares you hold already. Use a Stop-Loss limit to restrict potential losses on a share you've just bought, or to protect gains on shares you hold already. Rather than monitor the price continually, set a Stop-Loss trigger and your holding will be sold should the price fall to the level you set. Tracking Stop-Loss limits - gives you the added advantage of being able to lock-in profits should a share price start to fall back. Add a Tracking Stop-Loss limit and you've more control still. Here you can track a price as it rises, lock-on to the peak price, set a threshold and automatically sell if it falls below it. extra features Alerts - when a share price meets your limit, we'll let you know by , so you can decide whether or not to act. You can also choose to simply highlight the fact in your online account, or ask us to do both! Profit/Loss indicators - showing the current gain/loss compared to your acquisition cost Sector analysis - the quick way to check the spread of your investments across the different market sectors. managing your dividends As a PEP investor it's likely you're investing to build up the value of your capital, so you may want to choose to have dividends and other income automatically reinvested every quarter. Because we carry this out for all our customers at the same time, you benefit from reduced commission, as described in 'Costs'. Alternatively, you can leave this income in your account to invest when and where you want. However, if you are investing for income, you may prefer to have your dividends paid out to you. Choose this option and we can automatically pay them into your bank account each quarter. If you're not sure which option is right for you we'd recommend you seek independent advice. When you choose to reinvest your dividends, and any other income such as interest on any cash balance in your account, you can:

11 Page 6 of 7 Invest into any individual share, so long as you already hold some of those shares in the account. You can change your re-investment instructions at any time but please allow at least 3 days before the next re-investment is due to take place so we can act on your new instructions. Generally the quarterly reinvestment takes place around the 5th of Jan, April, July and October. Invest into the share of the highest value in the account. Choose this option and we'll automatically check to see which investment is the largest one by value and purchase more of those shares each quarter. You can also choose to have income automatically paid into your bank account; a particularly useful option if you're using investing for income. Set your choice using 'my profile' once you've signed into your account, or call our Customer Service team with your instructions. changes to your investments From time to time events may take place that affect your investments. This could be a takeover of one company by another, a merger between two businesses, an opportunity to buy more shares at a special price (a rights issue) or any other change that affects your shareholding. Collectively these types of event are known as 'corporate actions' and we will handle them for you. We'll explain the event that is about to take place, ask for your instructions and then carry them out on your behalf. In some cases you will be asked to vote - in the event of a takeover offer for instance. In other cases you'll be able to choose whether or not to take up an offer - as with a rights issue for instance. And on other occasions the change may be applied automatically to your shareholding, as in the case of a 'split' in the shares when the company is seeking to reduce the price of an individual share in order to make it more affordable for smaller shareholders. Whatever the event our Corporate Actions team will let you know about it, explain your options and ask for your instructions. We'll then monitor the event and, when the time comes, carry out your instructions. For a rights issue you can choose to: take up the rights by buying more shares. You can only use cash available in your PEP account to do this. Alternatively you could sell some of your shares to fund the purchase of the rights sell those rights and have the proceeds credited to your account transfer the nil-paid rights outside your PEP and then accept the offer. For a takeover you can accept the offer and have the proceeds paid into your PEP.

12 Page 7 of 7 The Share Centre is a member of the London Stock Exchange and is authorised and regulated by the Financial Services Authority and is entered in the register ( ) under reference Registered office: Oxford House, Oxford Road, Aylesbury, Buckinghamshire, HP21 8SZ. info@share.co.uk. Registered in England no VAT registration no Please read our RISK WARNINGS, TERMS OF BUSINESS & PRIVACY POLICY.