Clerical Medical has announced it is to cut regular bonus rates by 1 per cent on most with-profits policies.
The change sees many with-profits bonds receive a regular bonus of 1.5 per cent, down from 2.5, and 2 per cent for pension policies, down from 3 per cent. Bonuses on its with-profits income fund are unchanged at 4.5 per cent.
A with-profits endowment taken out for 25 years, with a premium of £50 a month will now pay out £55,450 down from £68,142 on February 1, 2003, a drop of 18.58 per cent and a yield of 9.27 per cent.
A traditional with-profits pension policy paying £200 a month over 20 years will now payout £140,401 as of February 1, 2004, down from £143,353 at August 1, 2003.