Mis-Sold Personal Equity Plan

Although Personal Equity Plans (PEPs) are no longer available, when they were available, they were often mis-sold and misrepresented to investors, including those looking to invest in them instead of, or in addition to their pension.

What are Personal Equity Plans?

Personal Equity Plans (PEPs) were investment plans that enabled UK citizens (aged 18+) to invest in various types of stock market-related investments. They were popular because they allowed investors to receive income and capital gains tax-free and at a greater rate compared to many other investments. 

For a while, they were also an attractive alternative to conventional pensions because they were tax-free and offered more flexibility in terms of how you were able to spend your money. Still, they did have their limitations with regards to the amount of money you could invest.

However, in 1999 they were replaced by Individual Savings Accounts (ISAs). Since then, PEPs have no longer been offered and, by 2008, all the remaining PEPs were converted into ISAs. After that point, investors could no longer add funds to their PEPs, but still enjoyed their tax benefits.

How were Personal Equity Plans mis-sold?

Mis-selling of PEPs was mainly based on misrepresentation in terms of their risks or their tax limitations and not disclosing the fees that accompanied them

Since PEPs require investing, financial advisers might have downplayed the fact that share value could both rise and fall – incurring the investor either a profit or a financial loss. Essentially, they were relatively high-risk investments and not taking into account the individual investor’s risk comfort level is one way in which PEPs were mis-sold. In the end, every investment has to be suited to the investor.

As for the limitations, income from a PEP would remain tax-free only for as long as the funds remained in the plan.

PEPs were also accompanied by management fees and other charges such as early withdrawal fees, which might not have been mentioned or clearly communicated with you.

Oftentimes, PEPs were placed into high-risk or extremely low-profit investment funds, financially leaving the investor at a loss.

Given all of this, it comes as no surprise that PEPs were one of the most commonly mis-sold investment products, along with SIPPs (Self Invested Personal Pensions) and final salary pension transfers.

Can I claim compensation for a mis-sold PEP?

If you had invested in a PEP and feel that your financial adviser had not checked that PEPs were a good choice considering your age, occupation, financial circumstances, plans and needs, tax obligations, and risk comfort level, you may have been mis-sold a Personal Equity Plan.

As with any investment, you should have been fully informed of the additional fees that it might entail, and the risks associated with it. If this information was not shared with you at the time of your investment, you might be able to claim compensation for a mis-sold PEP.

In essence, when making your investment, your financial adviser should have given you clear, explicit information about PEPs and made sure they were well-suited to your financial and other needs and abilities.

How can I stake my claim?

Return My Money aims to make this process as simple as possible. All you need to do is fill in your free, no-obligation assessment and we will get back to you with a way in which we can help you get compensation.

We operate on a no-win, no fee basis. This means there are no upfront fees to begin your claim and you won’t pay us anything if we aren’t successful..

Contact our pension experts now to reclaim your money risk-free or find out more.

FAQs

What is a Pension Equity Plan (PEP)?

Although the acronym is the same, Personal Equity Plans differ from Pension Equity Plans. While Personal Equity Plans were discontinued in 1999, Pension Equity Plans still exist. They are a type of retirement benefit plan. With Pension Equity Plans, a certain percentage of an employee’s average salary is multiplied by the number of years they’d been in a company. This amount is saved and is paid out to them in a lump sum when they retire.

What happened to my PEP when Individual Savings Accounts were introduced?

PEPs were replaced by Individual Savings Accounts (ISAs) on 6 April 1999. Since then, and by 2008, all the remaining PEPs were converted into ISAs. After that point, investors could no longer add funds to their PEPs, but still enjoyed their tax benefits.