New research shows that equity-based SSIAs performed strongly last year, compared to their poor performance the previous year. Life Strategies, an actuarial consultancy, this evening released a report into the performance of SSIAs in their second year.
The report says that over the last year, equity-based SSIAs have returned the strongest performance of the three different types of accounts. A typical equity based SSIA is now showing a value in excess of contributions invested (included the Government contribution) compared with a deficit of almost 10% this time last year.
Fixed rate accounts were clear leaders this time last year. However, with the ground made up by equity accounts, the value of a typical fixed rate account is currently similar to that of a typical equity based SSIA, the Life Strategies report shows. It adds that the estimated maturity value is still the highest when the effect of charges on the equity based SSIA are taken into account.
Variable accounts have fallen into third place, both in terms of current values and estimated likely values.
'The improved performance in equity markets has acted as a fillip for equity based SSIA products,' commented Jim Murphy, Director of Life Strategies.
'A typical equity based SSIA is now slightly ahead of a typical fixed rate deposit SSIA in terms of current values and equity accounts are now much better placed to outperform the other account types to the end of the SSIA scheme,' he added.
'However, there's no guarantee that equity returns will continue their upward trend and the bumpy ride to date serves to underline the volatility of returns on these types of accounts,' he added.
