M&S Money makes it easy to understand new PEP and ISA rules

The Government is making changes to the way Personal Equity Plans (PEPs) and Individual Savings Accounts (ISAs) work in the new tax year, to give certainty, simplicity and flexibility to savers. However, 79% of people are unaware that this is happening.

To help savers understand the changes to PEP and ISA rules, M&S Money has produced an online guide at marksandspencer.com\isa

Key changes from 6th April 2008:

You can invest in two separate ISAs each year - a Cash ISA and a Stocks and Shares ISA.

Mini and Maxi ISAs will no longer exist - any Cash ISAs you already have (Mini Cash, Tessa Only and Maxi Cash ISAs) will be reclassified as Cash ISAs.

The annual ISA allowance is increasing to £7,200 per tax year (from £7,000) - you can save up to £3,600 in a Cash ISA with one provider, and the remainder of the £7,200 in a Stocks and Shares ISA with the same or a different provider.

Any PEPs you have will automatically be reclassified as Stocks and Shares ISAs.

You will be able to transfer money saved in your Cash ISA to your Stocks and Shares ISA - this hasn't been possible before.

Brendan Cook, Chief Executive of M&S Money, said: "We welcome the changes to the PEP and ISA rules and hope that they give savers more confidence when deciding how and where to invest. Our customers often ask us to explain how tax-efficient savings work, so we have produced an online guide and Q& As which anyone can get from our website."

M&S Money guarantees that the variable rate paid on its Cash ISA (currently 5.25% AER/tax free) will at least match the Bank of England's base rate until 1st January 2010.

M&S Money also offers 1, 2 and 3 year Fixed Rate Savings with guaranteed interest rates up to 5.70% AER/gross, available both inside and outside an ISA wrapper.

Customers can apply at marksandspencer.com\isa.