Stakeholder pension: which date unit prices apply?

sal12345_2

A couple of months ago I made an application for a stakeholder pension online. I opted to make a single contribution of £1000 as well as monthly contributions of £60. I posted a cheque for £1000 and my bank statement shows a debit on my account dated 8th Oct. My regular contributions started on 10th Nov. I logged into my pension account online on 21 Nov and the single contribution hadn't been added to my fund but the regular contribution had. I sent them an email asking what had happened. I haven’t had a reply but on 24 Nov my online account showed the single contribution had been added. Also received a letter dated 21 Nov saying the single contribution would be added and telling me I had 30 days in which I could change my mind. What worries me is that my fund shows a loss of approximately £200. I’m sure unit prices have not changed that much since 21 Nov and am pretty sure they haven’t changed that much since 8th Oct. I was wondering how the date for the unit prices is chosen. Is it when I originally made the application, when my cheque cleared, when the units were added to my fund, or is the pension company free to choose any date?

dunstonh

I’m sure unit prices have not changed that much since 21 Nov

You dont say what the asset spread is but in general there has been a lot of volatility lately.

On 21st Nov the FTSE all share was 1890. On 3rd October it was 2522. Given the clearing cycle the investment date is likely to be a few working days before it cleared your bank. So, the £200 drop is reasonable if you were 100% equity based.

I was wondering how the date for the unit prices is chosen. Is it when I originally made the application, when my cheque cleared, when the units were added to my fund, or is the pension company free to choose any date?

It varies with different providers. However, the most common one is that the invesmtent date used is the one where they received your application form.