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L&G cuts WP payouts by 10%

Legal & General is the latest life office to cut its with-profits reversionary bonuses and maturity payouts.

Reversionary bonuses on its life and endowment policies drop to 2 per cent on the sum assured from 2.25 per cent and to 3.5 per cent on existing bonuses from 4.25 per cent in 1999. The maturity payout on a 25-year endowment policy based on a male aged 30 paying £50 a month falls by £9,553 to £86,895 from£96,448 in 1999.

The bonus rate cuts come as L&G&#39s year-end business results show operating profits are up by 15 per cent to £479m from £418m in 1999.

UK individual life and pension business rose by 11 per cent to £369m in equivalent premium income from £331m in 1999. But unit trust and Isa business fell by 14 per cent to £98m from £114m.

Funds under management increased by 6 per cent to £114bn from £108bn.

Group chief executive David Prosser says: “In our core UK individual life and pension business, we have achieved volume growth and maintained margins. We expect our agreements with Barclays and Alliance & Leicester to increase our UK individual equivalent premium income by a third in the first full year.”

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