CHARITIES PEP-UP

One of the big success stories in recent years has been the link-up between the charitable movement and the credit card companies, where donations are triggered for the benefit of the charity every time the credit card is used. Charities like Imperial Cancer Research, for example, have received over £10 million of donations.

Conspicuously these worthy schemes have only just started to spread to other areas of personal finance. PEPs for example, are owned by over five million people in the UK who have invested over £70 billion pounds and the profile of the typical PEP investor matches that of charity supporters. Therefore, it is not surprising that the first charity-linked PEP has recently been launched.

netPEP, the UK’s first online PEP provider, created the first charity-linked PEP just before Christmas linking with the Great Ormond Street Hospital Children’s Charity (GOSHCC). Under the scheme netPEP donates the first year’s annual fee to the charity on any investment made through GOSHCC’s web site without costing the investor a penny extra.

In the past, charities have been reluctant to link with PEP managers. This was partly because of concerns over investment returns and the risk of linking to a PEP manager whose relative performance was unpredictable. But also because the PEP industry was considered too small and specialised. However, the boost given to the industry by low cost competitors such as Virgin Direct is changing attitudes. The popularity of low-cost PEPs and the simplicity of tracker funds has opened a huge, new market for PEPs and with it the opportunity to develop charity-linked PEPs.

Richard Carswell, co-founder of netPEP said: "Low-cost tracker PEPs have drawn attention to the issue of charges and investors are taking much more care over their choice. We now want to go one stage beyond offering low-cost, high quality PEPs via the Internet, by giving investors a chance to use their PEP to make a worthwhile donation to charity.

"With the April deadline fast approaching and ever-increasing numbers using the Internet, we believe a PEP which generates income for charity in this way will be very popular. By joining forces with GOSHCC, we now offer a chance for investors to lock into their tax-free PEP allowance and help those less fortunate."

netPEP’s first charity-link has got off to a good start and already a link with another charity, the Royal National Institute for Deaf People (RNID), has been announced.

Representing more than 8.7 million deaf and hard of hearing people in the UK, RNID will collect a similar donation every time a PEP is bought or money is invested in netPEP’s FTSE Tracker Unit Trust through the charity’s web site. This scheme is also open to any existing PEP investors who wish to transfer to netPEP and to those who wish to invest direct in the FTSE Tracker Unit Trust.

RNID’s Alan Gosschalk, director of fundraising said: "RNID is committed to using technology to break down communication barriers for deaf and hard of hearing people, and partnerships of this kind are vital to achieve this goal. It¹s great that through netPEP¹s initiative the Internet is benefiting deaf and hard of hearing people in this way."

The Internet enables people who are deaf or hard of hearing to buy products and services online and communicate much more easily. And 58% of active web users own stocks, shares or unit trusts, making personal finance amongst the most popular sectors for e-commerce on the Web. This fact, combined with the efficiencies which the Internet provides i.e lower costs and convenience, should make charity-linked PEPs as popular as charity-linked credit cards.

The efficiencies of the Internet create better quality services which in the case of netPEP gives investors: online valuations around the clock; investment management by the world’s largest index tracking fund managers; an online Tr@cker magazine with the latest news and views in the marketplace and online voting powers for a very low annual fee of 0.35%.

netPEP’s straightforward mission is to give investors better value for money, greater convenience and better quality services. This is all made possible because of the benefits of the Internet which are being applied for the benefit of two of Britain’s major charities.