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L&G adds £387m in with-profits bonuses as investment returns hit 9.6%

Legal & General added £387m in bonuses to 445,000 with-profits policies during 2014 as the provider delivered pre-tax investment returns of 9.6 per cent.

The insurer, which recently closed its with-profits fund to new customers, says over 25 years its with-profits savers have seen their assets grow 8.1 per cent a year, while over 10 years returns have been 7 per cent a year.

Total bonuses added fell from £490m in 2013. L&G says this reflects a reduction in the number of mortgage endowment policies maturing, from 45,000 in 2013 to 29,000 in 2014.

The provider could not provide a breakdown of annual and final bonus rates, or whether they had risen, fallen or been frozen.

L&G Assurance Society managing director of mature savings Jackie Noakes says: “Our with-profits customers will benefit from another year of strong investment returns for 2014 of 9.6 per cent. This clearly demonstrates the benefits for our existing customers of remaining invested with a with profits provider operating active management of a balanced asset mix.

“By investing in a broad spread of assets we continue to deliver steady growth to our policyholders who also benefit from protection from market volatility through ‘smoothing’ of payouts.”

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