Maxi, Mini, Tessa And Peps Where Did They

Insurance If you have been a responsible saver in the UK, you may be familiar with terms like TESSA and PEPs. However, recent years have seen new terminology come into play in the form of a variety of ISAs , or individual savings accounts. What are these relatively new ISAs all about and where did the TESSAs and PEPs go? We have the answers to your questions so you can stay up to date on the latest British tax wrapping strategies. TESSAs TESSA stands for tax-exempt savings account, which were introduced in 1990. Their purpose was to allow investors to put money into either a cash or shares savings account without having to pay taxes on their earnings. In 1999, TESSAs began their conversion to TESSA-only ISAs, which have since become simply cash ISAs. British investors held onto these accounts long after their conversion due to the five-year terms. At the end of the term, account holders had the option of cancelling their accounts or rolling their TESSA funds into ISAs. PEPs PEPs, or personal equity plans, were first introduced in 1987 and were used to encourage Brits to invest in UK-listed companies. The investment maximum was much less than the contribution limit for ISAs, and the ambiguous regulations governing these investments were the cause of many complaints by investors. By 1999, PEPs were shifting to stocks and shares ISAs , and by 2008, all existing PEPs had automatically converted to ISAs. Mini and Maxi ISAs The first ISAs were categorized as mini and maxi accounts, with the latter primarily used to invest in stocks and shares ISAs. The full amount of the contribution could also be split between stocks and shares and cash accounts, similar to the guidelines of todays ISAs. However, many ISA managers did not offer a cash option for maxi ISAs, and thus, most of the focus of these accounts was on investing rather than merely saving. Mini ISAs were primarily for placing cash into an interest-bearing account, similar to a cash ISA today. There was also an option to invest in a mini stocks and shares ISA. Individuals could only open one mini or one maxi ISA each year under former rules. Today, mini ISAs have converted to standard ISAs, and the maxi and mini distinctions no longer exist. Instead, individuals may open one shares and one cash ISA each year, as long as their total contribution does not exceed the limit set by current ISA guidelines. The conversion of these accounts has been an automatic one, so account holders did not have to initiate any changes to allow the conversion to take place. However, individuals who are not happy with the conversion can transfer ISA funds to other managers or accounts, although shares ISAs cannot be transferred to cash ISAs as a rule. Understanding former account terminology can be helpful in dealing with todays British ISA market, since former terms may arise from time to time. The good news is that the ISA conversion has broken the accounts into two distinct categories, making it much easier for account holders to get the best ISA for their needs. About the Author: 相关的主题文章: