pension question - dividends?

ALYMAC76

i have a pension with axa through my work which between mine and they contributions 13% is put in, scheme is 2040 retirement, i have registered to can access pension online and you can see the unit price go up and down each day, been in pension 14 months, i have some shares separate to pension and know every year i should get a dividend, does this also apply to my pension units? ie at a certain time each year should it get say extra units purchased from a dividend? sorry if this is a dumb question just i am a little lost! many thanks

dunstonh

does this also apply to my pension units?

Yes.

However, pension funds are accumulation units and not income units. So the income is reflected within the unit price rather than having the income buy more units.

Debt_Free_Chick

Just to add to Dunstonh's response....

With your shares, you get a cheque (or direct bank credit) for your dividends. With the pension fund, the dividend is paid back into the pension fund. The value of that fund increases and is, therefore, reflected in the unit price.

Debt_Free_Chick

Also worth bearing in mind that with the pension fund you don't own the shares in the relevant stocks (companies). Instead, AXA own them and you own units, representing your share of the total investments in that fund. If you add up all the units held by all the pension investors in that fund, the total would equal the value of the shares owned by AXA (near enough, anyway!)

ALYMAC76

Thank you for your replies, last stupid question for the day, with the unit prices moving up down every trading day when my monthly contributions go in i take it how the purchase price is the actual unit cost on the day they receive my contributions so in theory better for me if unit price is down on the day they receive my contributions?

Debt_Free_Chick

Pretty much, yes. Essentially, the lower the price the more units you buy for the same amount of cash e.g. if the price of the unit is 20p then you get 5 units per pound. If the price is 10p, you get 10 units per pound.

The price may have been fixed the previous day - or may be calculated on the day of purchase. Either way, a day is not likely to make a huge difference.