View more on these topics

L&G cuts with-profits bonus rates

Legal & General has cut bonus rates by 0.25 per cent on average for with-profits customers while payout values have increased by around 5 per cent.

The provider says while bonus rates are down slightly on average, compared to 2010, this is dependant on product type and entry date.

The bonus rates for conventional endowment business, including mortgage endowments, were held at 1.25 per cent, the same as last year.  But on average, for unitised pension business, and L&G’s income and growth bonds, bonus rates were cut by around 0.25 per cent.

Its with-profits fund returned 1.7 per cent before tax on assets held for with profits last year.

A male with-profits pension customer retiring at age 65, paying £200 a month, would have seen a 5.3 per cent increase in the payout value compared to the previous year for the 10-year plan term, 5.2 per cent for the 15-year plan term and 4.7 per cent for the 20-year plan term.

L&G with-profits actuary Tim Sheldon says: “In current market conditions the core features of with-profits, which combine a balanced asset mix with smoothing of investment returns and underlying guarantees, mean with-profits remains a good choice for investors seeking steady growth from a spread of investments over the longer term with some downside protection.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com