Friends Provident has increased the guaranteed bonus rate on its with-profits fund from 1.75 per cent to 2 per cent after it returned 13 per cent last year.
In addition, the Axa Sun Life and Sun Life with-profits funds returned 13 per cent and 11 per cent respectively.
The guaranteed bonus rate for the Axa Sun Life main unitised with-profits fund remains unchanged at 3 per cent. There is no guaranteed bonus rate on the Sun Life with-profits fund.
Friends Provident chief actuary Andy Carr says: “2010 saw further improvements in investment market conditions, with positive returns from all major asset classes resulting in increased payouts for the majority of with-profits policyholders.
“It has been possible to increase regular bonus rates across a number of Friends Provident products, particularly pensions, leading to a modest increase in the rate at which guarantees build up.”
Intelligent Pensions IFA David Trenner says: “It is difficult to see why anyone with a decent amount of money would want to invest in a with-profits fund.
“If markets fall, you do not have any protection and when the markets go up, with-profits underperform.”