Buy it from a discount broker such as the London-based Chelsea Financial Services and you will get it even cheaper

Buy it from a discount broker such as the London-based Chelsea Financial Services and you will get it even cheaper. The minimum investment, however, is a chunky pounds 3,000.MORE power to the Your Money pages. It is the cheapest of its kind and should deliver what it sets out to – stock market performance. But the much greater flexibility of the PEP is probably the more persuasive point.In general, you should only put money into PEPs that you can afford to leave alone for at least five years – to give yourself the best chance of benefiting from the greater potential of the stock market as a home for your savings.But PEPs at least still give you the option of taking a tax-free income from day one, or getting your money back at any time if you need it for holidays or other big-ticket items.And my recommendation for PEP buyers? Legal & General’s Index-Tracking PEP.

These are people – in particular the relatively young – in company pension schemes who are thinking of making last-minute additional voluntary contributions (AVCs) to the bolt-on extra pension plans offered by employers. Inevitably, people will have been put off by the stock market’s recent jumpiness And for many people that hesitation is understandable. But there is much to be said for putting the money into a PEP instead.AVCs offer tax relief at your highest rate on your contributions, their value grows tax-free, the money can only be got back in the form of a drip-fed pension when you retire, and this pension is subject to income tax.PEPs, by comparison, offer no upfront tax relief, but all investment profits and income are tax-free, and these can be cashed in at any time.One concern for AVC buyers is that income tax rates might be higher in retirement than they are now, offsetting the kicker of upfront tax relief. The tax relief on these cannot be carried forward into the new financial year and can seem an important tax break to take up. After all, you will still be able to buy a PEP in the new tax year as soon as the market looks less vulnerable.
But there is at least one group of people that should seriously consider the virtues of PEPs this week. You can also open this account if you donate more than pounds 10 a month via payroll giving, and then use the chequebook and debit card offered with the account to give to any recognised charity.q Jean Eaglesham works for `Investors Chronicle’.. THE TAX year ends on Friday, which means that this really is your last chance to take up this year’s PEP allowance.

You get tax relief at your highest rate of income tax on donations of up to pounds 75 a month (pounds l00 from 6 April). For a higher-rate taxpayer, this means that for every pounds 6 reduction in their taxed income, the charity effectively gets pounds 10.q Gift Aid. You also get full income tax relief on single donations to charities of at least pounds 250. The gift is paid net of 25 per cent tax to the charity, which can then reclaim the tax, while higher-rate taxpayers can reclaim an extra 15 per cent relief on the gift through their tax return.The Charities Aid Foundation (01732 520000) offers an account which allows you to benefit from the pounds 250 Gift Aid tax relief while spreading the donation between several charities. If your employer runs a Give-As-You-Earn scheme, you can give a set monthly amount to the charity of your choice. True, the annual rates charged for borrowing (APRs) on many affinity cards – at around 20 to 24 per cent -are in line with many of the big credit cards on the market. But at up to four times the bank base rate of interest, these are all appallingly expensive.By comparison, for people who borrow a lot on their card, the Robert Fleming/Save & Prosper Visa card charges an APR of just 11.5 per cent, with no annual fee.