Liverpool Victoria is reducing with-profits payouts by between 13 and 18 per cent due to continuing difficulties in the equity markets.
Reversionary bonuses are cut from 4.5 to 3.85 per cent for conventional with-profits and from 4.5 to 2.25 per cent on its unitised with-profits bond.
The mutual says the payout on a £50 a month 25-year policy will be £93,503 compared with £113,456 last year. An equivalent 10-year policy will pay out £9,489 compared with £10,942.
Liverpool Vic says it does not want to maintain artificially high headline rates but takes a prudent approach to bonus payments. Group actuary Ian Blanchard says: “The annual rate of return of 12.5 per cent on a 25-year policy maturity payment emphasises the continuing relevance of with-profits for investors looking for medium to long-term capital growth. It also illustrates the benefits of Liverpool Victoria's underlying financial strength and our ability to smooth returns during poor market conditions.”