Legal & General has held annual bonuses for its 550,000 with-profits customers as pre-tax returns hit 10.6 per cent during 2012.
Over the past 10 years the assets held on behalf of L&G’s with-profits policyholders have generated an annual return of 7.7 per cent before tax, while returns over the past 25 years have been 8.8 per cent.
However, annual bonus rates, which provide members with guaranteed growth, have been frozen for all mortgage endowment, bond and unitised pension policies.
A spokesman says terminal bonuses for maturing policies will be higher this year compared with last year as a result of the increase in the value of with-profits assets.
Total bonus payments, which includes both terminal and annual bonuses, increased from £459m in 2011 to £471m last year.
L&G with-profits actuary Tim Sheldon says: “This year’s results have produced double digit returns demonstrating the advantage of the freedom to capitalise on opportunities to boost investment returns for our policyholders.”
Standard Life, Aviva and Friends Life have all reported strong performance in their with-profits funds in 2012. Despite this, annual bonus rates have been held or reduced for most savers.
Radcliffe & Newlands chartered financial planner Mel Kenny says: “In these unusual economic times, it is not surprising to see no change in the annual bonus, thereby placing much of the emphasis on the terminal bonus.
“However, for long-term policyholders, this continues to represent a change in expectations compared to when they first made their investment.”