Plea for bonds in Peps

Paul Durman
Saturday 30 January 1993 00:02 GMT
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CASH deposits have Tessas and shares have Peps, but there are no tax shelters with catchy names to encourage savers to invest in bonds.

The unit trust industry thinks this is unfair and is lobbying hard to persuade the Chancellor to make changes in the March Budget. The Unit Trust Association wants the rules relaxed to allow personal equity plans to invest in fixed-interest bonds.

Quite apart from helping unit trust companies to sell more of their bond funds, the industry argues that the move would help the Government to fill a pounds 50bn hole in the nation's finances by allowing private investors to buy gilts (government bonds) through Peps.

Peps were conceived as a way of encouraging private investors to back British industry by buying shares, but large companies also issue bonds as an alternative source of finance, and the Association of Corporate Treasurers is keen for Peps to be allowed to invest in them.

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