§ Lord Higginsasked Her Majesty's Government:
Further to the Written Answer by Baroness Hollis of Heigham on 22 July (WA 21), what £1,000 in a stakeholder pension invested in a "tracker fund" tracking the FTSE 100, the FTSE 250 and the FTSE 350 and an appropriate bond fund respectively, when the scheme was introduced, is now worth. [HL5569]
§ Baroness Hollis of HeighamSchemes operate tracker funds in a variety of ways. The exact current value of money invested in a stakeholder pension will depend on a number of factors, such as the date of the investment and the specific nature of the stakeholder's charging structure. Also, for a given index tracked, fund performance may vary. For these reasons no specific answer can be given.
Data are available from Trustnet (www.trustnet.com) on the performance of all "tracker funds". In the year to July 2002 performance across UK "tracker funds" ranged from a 10 per cent growth to a 77 per cent fall. Reference can be made to this source for details of individual funds.
These figures relate specifically to the growth in value of a unit holding over a specified period assuming that distributions (dividends net of the standard rate of tax) are re-invested to purchase additional units of a fund at the closing bid price applicable on the ex-distribution date.
In general, pension saving is a long-term investment, and it is not therefore helpful to consider fund performance over just one year.