Investment returns boost Friends Life with-profits payouts

Friends Life has increased or held with-profits bonus rates for the majority of its 1.7 million customers as positive investment returns allowed the provider to increase payouts.

The firm increased or held final bonus rates for the Friends Life FP with-profits fund, formerly the Friends Provident life and pensions with-profits fund, compared with January 2011.

Regular bonus rates have been maintained, while some unitised rates have increased. Friends Life says overall payouts to the fund’s 891,000 customers were “slightly higher” than last year.

The fund achieved investment returns of 5.6 per cent for pre-demutualisation business and 4.3 per cent for post-demutualisation business in 2011.

Similarly payouts to the 587,000 investors in the Friends Life Company with-profits fund, previously the Axa Sun Life with-profits fund, have increased compared with last year.

The company says most final bonus rates have either increased or stayed the same, while regular bonus rates have been held. The fund produced a return of 1 per cent last year.

The insurer says there were “modest” changes to final bonus rates in the Friends Life Assurance Society with profits fund, formerly the Sun Life Assurance Society with-profits fund.

Most regular bonus rates were frozen for investors in the fund, which has 208,000 investors. The fund posted a return of 0.9 per cent in 2011.

Regular bonus rates in the FPLAL closed fund, which has 14,000 customers, were held while some final bonus rates were increased and some were decreased.

Friends Life chief actuary Andy Carr says: “2011 was again a challenging year for the investment markets but, despite this tough environment, we are pleased that the majority of with-profits payouts are higher than those we announced a year ago.”