As a general rule the higher the income, the greater the risk, and the less the prospects of a capital gain and vice-versa. As many again are expected to set out their wares between now and the end of the year. With so many new launches still to come, competition is set to hot up, and charges will most likely fall. The consensus among independent financial advisers that the Independent on Sunday has contacted is to sit on your hands, do absolutely nothing, and wait to see what else comes up. The Association of Unit Trusts and Investment Funds (Autif), the industry body, records 23 corporate bond PEP launches so far. Some are new funds set up for the purpose; others are revamp- ed income funds in a PEP wrapper. You can be forgiven for feeling confused as to what you do now, faced with an already vast array of products.

OK PEP pickers You have been bombarded with corporate bond PEP ads. Bank of Scotland, First Direct and Halifax offer applies to existing customers.Clydesdale charges pounds 30 fee, Alliance & Leicester, N&P and Abbey National require repayment by direct debit, Barclays offers up to pounds 100 of Boots vouchers.Source: Moneyfacts (01692-500765).. It will always pay to shop around.How much a car or general loan will costLender Loan (pounds ) Monthly Payment APR%(pounds 6,000 over 36 months)with insurance withoutCar loansAA 1,000-10,000 257.29 209.00 15.2-15.3Alliance & Leicester 2,500-7,500 224.46 201.13 13.4Bank of Scotland 500-15,000 233.77 206.49 15.9-16.1First Direct 1,000-15,000 226.24 199.92 12.9Halifax branch 500-10,000 232.56 212.78 15.9-17.9HFC Bank 500-10,000 250.40 219.41 20.5Nationwide branch 1,000-10,000 229.47 210.12 16.9TSB branch 500-12,000 239.70 207.57 15.9General purpose loansClydesdale 500 upwards 221.90 201.56 14.0N&P 1,000-10,000 233.63 204.13 14.5Abbey National negotiable 228.44 204.98 14.9Midland Bank 500-10,000 231.63 204.99 14.9Barclays Bank 500-10,000 237.10 207.70 15.9Notes: AA charges 1 per cent fee, offers insurance and inspection discounts and upgrade to Relay Service Rates apply to members only. Special offers from the AA, TSB and HFC Bank are significantly more expensive, but come with a range of goodies including cheaper breakdown cover, motor insurance and special rates if you want the car professionally inspected.But as Moneyfacts points out, you might well be able to get as cheap a rate of interest by taking out a general-purpose unsecured loan from any one of a number of banks and building societies. But nearly every new car sold generates a second-hand sale, and in the current climate the second-hand car market also needs attractive finance packages to oil the wheels. Moneyfacts, the Norfolk-based financial information service, has picked out special finance deals on offer for car buyers The cheapest no-frills loans come from First Direct, which will offer an existing customer an unsecured loan of pounds 6,000 repayable in 36 monthly instalments of just under pounds 200, at an annual rate of just 12.9 per cent.That does not include insurance against redundancy or sickness, which would raise the monthly payments to pounds 226.24, and the total payments to pounds 8,144.64 over three years.Including insurance, the cheapest offer is from Alliance & Leicester, which charges pounds 224.46 a month, and pounds 8,080 over the period. MOST car manufacturers worth their salt are promoting new car sales with zero per cent finance or deferred payments, and motor dealers will also be doing their bit to boost sales of new N- registration cars, with discounts and attractive trade-ins.

It also has no quarrel with profit- sharing schemes, which give tax advantages to employees willing to wait five years to cash their rewards.For the present, anyway, it says it has nothing against profit-related pay, which was officially encouraged with tax concessions Lord Lawson introduced less than a decade ago, and now costs the Exchequer an estimated pounds 800m each year.In practice, many employers have used PRP as a cheap alternative to increases in basic pay, meaning many employees have found that their total pay holds steady when their employer is doing well and falls - or fails to keep pace with the cost of living - when profits decline.. As far as it is concerned, the merit of an option and its incentive value are less important than its taxability.The official line is that options had become an pounds 80m drain on the Exchequer that could no longer be justified.The Treasury does say, however, that it has no quarrel with save-as-you- earn schemes, which enable 1 million employees to buy shares out of income, often on artificially attractive terms. Too many have either been handed out free or have priced to offer a one-way bet, regardless of whether performance improves.If options are granted on terms that mean they have no initial value and only acquire value if the company meets specific performance targets - by growing profits at a faster than average rate or if the shares outperform comparable shares on the stock market - no-one should reasonably complain.It has to be said, however, that the Treasury does not see it that way at all. They are only available to employees of public companies with quoted shares or plans for an early listing.

Equally deserving employees of private companies or the mass of companies bought or set up in the UK by foreign investors miss out.The spate of executive options that have created the current crisis have furthermore been handed out on terms that bear little or no relationship to profits and efficiency. But in the current climate, that cannot be taken for granted.Share-option schemes do have their shortcomings. Asda employees and others like them will be taxed as income on any future share options they are allowed. Hope- fully their employers will make up their earnings in other ways with increases in basic pay or bonuses - and make sure they are no worse off after tax even if it means a substantial increase in payroll costs.

That is what Sir Richard was supposed to stop, and both he and the Chancellor have so far totally failed to address the issue.Meanwhile, however, the Chancellor has closed the door on share options as a way of rewarding junior employees. But there is still nothing to stop them awarding themselves additional benefits to make up the difference. But the fat cats who triggered the problems investigated by Sir Richard Green- bury and his committee have also got clean away with the cream, the canary and the caviar. Their option schemes will be taxed as income instead of capital gains in future, but either way the tax rate is 40 per cent and all they will actually lose is the ability to use the tax- free capital gains allowance of pounds 6,000 a year. They will have to pay an extra pounds 2,400 a year in tax on future share options. The thin cats at Asda, who have been given tax-free share options as a substitute for pay rises, will not now have their existing options taxed as income. It has just revised its booklet, Simple Guide to Classic Car Insurance.. BY CAVING in to pressure and compromising on the taxation of share options, the Chancellor achieved the worst of both worlds last week.