Legal & General has held annual with-profits bonus rates for 475,000 customers as assets grew 9.1 per cent during 2013.
The decision means the company paid out £490m in bonuses to policyholders during the year, up from £471m in 2012.
The firm says the increase in bonus payouts reflects strong investment performance and the fact 45,000 mortgage endowment customers saw their with-profits policies mature in 2013.
Over 10 years a single premium investment in L&G’s with-profits fund would have returned 7.3 per cent before tax, while over 25 years it would have returned 8.5 per cent.
Legal & General Assurance Society managing director with-profits Carole Avis says: “Our with-profits customers will benefit from another year of strong investment returns for 2013 of 9.1 per cent. This clearly demonstrates the benefits of investing with a leading 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.”
L&G says it will continue to keep bonus rates under review.
Hargreaves Lansdown head of financial planning Danny Cox says: “We have not recommended with-profits since June 2002. The model is outdated and inflexible. The fact that L&G’s fund returned 9.1 per cent and bonuses have stayed the same shows they are holding back money for a rainy day rather than distributing it to policyholders.”