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Friends Provident announces with-profits bonus rate review

Friends Provident has reviewed the with-profits bonus rates across all of its investment funds after its main with-profits fund returned 13 per cent last year.

The Axa Sun Life and Sun Life Assurance Society with-profits funds returned 13 per cent and 11 per cent, respectively. The guaranteed bonus rate in the Friends Provident main unitised pension product has risen from 1.75 per cent to 2 per cent on the back of the results. This rate does not apply across the main Friends Provident fund.

It is the first time the bonus announcements of all three with-profits funds has been made since Friends Provident acquired a majority stake in Axa’s UK life business in September last year.

Friends Provident chief actuary Andy Carr says: “2010 saw further improvements in investment market conditions relative to the lows of the past two years, 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.”

Friends Provident, which will become Friends Life in March this year, confirmed all three funds will remain independent.

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