Friends Provident is cutting bonuses on its with-profits policies with payouts falling by an average of six per cent.
Regular bonus rates on its with profits “Main Series” products have fallen by between 0.25 per cent and 1 per cent. The changes see regular bonuses on its new generation pensions fall from 3.4 per cent in August to 2.4 per cent this month. Pension investment bond bonuses are down to 1.5 per cent from 2.5 per cent, and unitised with-profit bonds are down to 1.5 per cent from 2 per cent. Conventional endowment and conventional personal pension plan bonuses have both halved, falling to 0.25 per cent from 0.5 per cent. There has also been reductions in some final bonus rates.
Friends Provident Life and Pensions managing director Ben Gunn says: “Although the with-profits fund has returned positive growth at 9.4 per cent for the first time in three years, the cumulative investment since 2000 is still negative, at minus 6.5 per cent, reflecting the large fall in investments over this period.”