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&#39Payout cuts to be in line with rivals&#39

With-profits policyholders have been told by Standard Life that payouts will not be affected immediately and it intends to go ahead with its scheduled annual bonus declaration on January 29.

It warns that payouts are likely to be cut to reflect the smoothing carried out in recent years but says any reductions will be “broadly in line” with rivals. Surrender and transfer values are also unchanged.

John Scott & Partners investment manager Patrick Connolly predicts that annual rates will come down marginally or stay the same while the real cuts will be made on 10-, 15or 25-year maturity policies, as Norwich Union has done.

Connolly says: “I think it has very little choice and will do what it says it will. If it cuts bonuses out of kilter with the Prus and Norwich Unions of this world, it will set people&#39s alarm bells ringing even more.”

Torquil Clark investment director Philippa Gee says: “We would hope it would be in line with the competition, as any more than that will be a serious concern for investors.”

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