This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.

L&G cuts with-profits bonus rates

  • Print
  • Comment

Legal & General has cut bonus rates by 0.25 per cent on average for with-profits customers while payout values have increased by around 5 per cent.

The provider says while bonus rates are down slightly on average, compared to 2010, this is dependant on product type and entry date.

The bonus rates for conventional endowment business, including mortgage endowments, were held at 1.25 per cent, the same as last year.  But on average, for unitised pension business, and L&G’s income and growth bonds, bonus rates were cut by around 0.25 per cent.

Its with-profits fund returned 1.7 per cent before tax on assets held for with profits last year.

A male with-profits pension customer retiring at age 65, paying £200 a month, would have seen a 5.3 per cent increase in the payout value compared to the previous year for the 10-year plan term, 5.2 per cent for the 15-year plan term and 4.7 per cent for the 20-year plan term.

L&G with-profits actuary Tim Sheldon says: “In current market conditions the core features of with-profits, which combine a balanced asset mix with smoothing of investment returns and underlying guarantees, mean with-profits remains a good choice for investors seeking steady growth from a spread of investments over the longer term with some downside protection.”

  • Print
  • Comment

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

Money Marketing Awards 2015
Put your firm forward as the leading practitioner in your field. Adviser and Advertising categories are open to entries - Enter Now.

Have your sayEdit my profile/screen name

You must sign in to make a comment

Fund Data

Editor's Pick


Are you prepared to process insistent client business?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments