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Abbey Nat scraps bonuses as payouts plummet

Abbey National says it will not pay bonuses on with-profits policies with Scottish Mutual, Scottish Provident and Abbey National Life unless contractually obliged to by guarantees.

Payouts across Abbey Nat-ional Group&#39s life companies have been slashed by up to 25 per cent.

The company has already started selling Prudential with-profits funds after closing its own with-profits funds to new business. But it insists it is still going to be a player in the smoothed investment market with the launch of a Sandler-style with-profits product.

Abbey says it has pumped nearly £1bn into its life subsidiaries in the last 18 months.

A £50 a month 25-year endowment will pay out £58,599 on maturity compared with £78,616 a year ago.

Abbey National intermediaries sales and marketing director Ambrose McGinn says: “I am concerned that competitors&#39 payouts may not be sustainable. We remain committed to our life businesses and have taken sustainable and prudent action. We have to look at policyholder interests first but these have to be balanced against shareholder interests.”

Chartwell chief executive Craig Wetton says: “It seems harsh initially but to get a nil return at the current time is still to be doing rather well. Reality is unpalatable but we would be more worried by firms that pretended nothing was wrong. There are always going to be suspicions about a closed fund.”


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Tuesday, 11 February 2003 Type: Offshore whole of life fund Aim: Growth by investing in performance bond, self-directed bond Minimum investment: Performance bond – £10,000, self-directed bond – £50,000 Place of registration: Dublin Investment split: Choice of performance bond, self-directed bond Isa link: No Charges: Performance bond &#45 initial 1.25% a year for five years, […]

Disdain for curb on suite equities

IFAs and product providers have poured scorn on the Treasury&#39s recommendation that the equity products in its suite of stakeholder products should have a maximum equity exposure of 60 per cent.In its consultation paper on the Sandler stakeholder products, the Treasury is proposing the unit trust and the underlying assets of the with-profits and pension […]

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FMO setting up adviser network

First Mortgage Options, which provides nonconforming and sub-prime loans, is setting up an intermediary network offering exclusive products, services and technology support.FMO is aiming to have 200 member firms in six months and 450 by the end of the year.It is running a series of 18 roadshows in the UK to attract members starting in […]


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