Standard Life cuts with-profits bonuses for 750,000 savers
Around 750,000 Standard Life customers will see their with-profits bonus growth rate cut following a review by the provider.
Savers holding unitised with-profits life plans with a 3 per cent price growth guarantee and unitised with-profits pensions with a 4 per cent price growth guarantee will see no change in their bonus rates, despite the funds achieving gross returns of 8.7 per cent in the year to December 31, 2011.
Bonus rates on with-profits bonds, which returned 1.8 per cent over the year, have also been held at 2.5 per cent.
However, customers in the providers’ other unitised life plans will experience a bonus rate cut from 1.25 per cent to 0.75 per cent. Savers in other unitised pension plans will see their bonus rate reduced from 1.5 per cent to 1 per cent.
For a full breakdown of with-profits bonus rates and investment returns see the tables underneath this story.
A Standard Life spokeswoman says around half of its 1.5 million with-profits customers will have their bonus rates cut as a result of the review. She says the decision will give the provider greater flexibility when making future investment decisions.
Standard Life with-profits communications manager Margaret Flaherty says: “Despite the very unsettled market conditions we have seen over the last year we are pleased to say that most customers will see a year-on-year increase in the value of their plan.
“We have reduced the bonus growth rates for some plans from today to maintain investment flexibility over the long-term.
“How this review affects individuals customers depends on many factors, including their age when their plan started and the timing and amounts of payments into their plan.”