For Immediate Release: Friday 1 May 1998

EQUITY VS DEPOSITS OVER THE LONG TERM

• Over 10 yrs to 1.4.98, the annual income from an average UK Equity Income unit trust rose 60% to £72; while the income from an average Corporate Bond fund settled above £50 and the interest from a savings account dropped 141% from £70 to £29
  
• The capital invested in April 1988 in an average UK Equity Income unit trust more than doubled over 10 years, with £1,000 rising to £2,176.
  
• By the end of 10 yrs, the £1,000 in the UK equity fund was in total 98% ahead of the savings account (£3,279 against £1,658), and 58% ahead of the bond fund, with similar variances for an international equity fund (see chart)
  
• Over 20 yrs, the lead extends to a £17,185 difference between the equity fund and savings account, and to £23,844 where the investment has been held in a PEP vs a gross paying savings account
  
• For a non-PEP £50 regular savings plan in the UK Growth sector, by 10 yrs the equity was 74% ahead of an equivalent amount on deposit, and by 116% over 20 yrs, with slightly less margins for the equivalent gross paying funds
  
• A lump sum of £1,000 invested over 15 yrs in an average UK Equity Bond fund ended 69% ahead of the equivalent return in a managed life fund; while the difference for a £50 regular savings plan was 35%
  
• £1,000 in a UK Equity and Bond fund at the end of 10 yrs was 115% ahead of the Retail Price Index which itself had risen by 55%
  
• Over 15 yrs, the top 3 performing unit trust sectors were Europe (return of £33,450 on £1,000); UK Equity and Bond (return of £32,587 on £1,000) and UK Equity Income (return of £30,042 on £1,000)

For further comment please contact:

Anne McMeehan, Director of Communications, AUTIF, 0171 831 0898
Brian Harvey, Head of Statistics, AUTIF 0171 831 0898