Standard Life cash fund falls 5% after revaluation

Thousands of Standard Life pension customers have seen the value of their pension drop following a 5% fall in an underlying fund.

The company has written to customers to inform them that the unit price of its £2.4 billion Sterling Pension fund has today been decreased by 5%.

‘Economic and financial conditions in the UK have become increasingly turbulent over recent months,’ the company said in the letter to customers. ‘This turmoil has manifested itself in many ways, including a worsening of the investment environment, which has reduced asset values and investment returns.’

The fund holds a combination of assets, including Treasury bills and money market instruments such as asset backed securities, which aimed to provide better returns than a bank or building society account over time.

But substantial falls in these securities have led to larger than expected falls across the fund, the company said.

‘Despite the current difficult market conditions, we continue to believe that the fund is a good investment choice for many customers,’ said a Standard Life spokesman. ‘Overall, the assets held within the fund are considered to be of high quality and, based on current expectations, represent sound investments.’

There are 97,000 customers in the fund across individual pensions, Sipp and group pensions. Standard Life said that over the long term it expected the fund to recover but anticipated short term fluctuations in line with market movements.