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Another bonus blow from AMP

AMP&#39s already shaken with-profits policyholders have been struck another blow after being told many of them can expect no bonuses of

any kind in the future.

The latest news follows AMP&#39s announcement earlier this month that under its plans to demerge its UK and Australian operations it would also move its with-profits funds out of equities.

Policyholders received a letter last week advising them of the changes and outlining to London Life with-profits fundholders that future annual bonuses “are likely to be less than has historically been paid, and will be zero for many policies”.

The same was said for future terminal bonuses which will be zero for “some” policies.

The news is worse for National Provident Life with-profits fundholders, who were told their annual bonus rates have “generally been reduced to zero and are likely to remain at zero (except where they are guaranteed)”. There is no mention of changes to terminal bonuses.

IFAs have expressed their concern at what they term as the finality of the announcement. But they say that, despite their reservations over AMP&#39s move, they will not be making any blanket recommendations to pull out but instead advise policyholders on an individual basis.

Hargreaves Lansdown head of pensions Tom McPhail says any possible action would be affected by when the policy was taken out and what the surrender penalty was at the time.

Syndaxi Financial Planning principal Robert Reid says: “I think you will generally see people saying enough is enough but it depends on what other contracts are available.”

Michael Philips proprietor Michael Both says: “I am surprised by the finality of the announcement as it is not suggesting that this is a temporary measure.”


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