LV= has held annual bonus rates on most of its with-profits policies after the provider’s with-profits fund earned an investment return of 5.7 per cent in 2011.
Just two of LV=’s 13 with-profits products saw any change in the annual bonus compared with 2010.
Bonus rates on with-profits pension annuity series 3 & 4 policies were cut from 2.5 per cent to 1.6 per cent, while the annual bonus rate on the flexible whole life plan rose from 4.78 per cent to 5.54 per cent.
The surrender value on LV=’s five-year with-profits growth bond increased from £10,825 in 2010 to £12,292 last year, based on a single premium £10,000 investment made by a 30-year-old male.
The surrender value on a 10-year mutual investment bond for the same person increased from £12,900 in 2010 to £14,388 in 2011.
The provider also launched a mutual bonus last year. It is discretionary and based on an assessment by the LV= board of the provider’s financial performance and capital position over the year.
The bonus took the form of an additional investment into members’ with-profits funds and represents a rise of 1 per cent to the asset share value.
LV= with-profits spokesman Paul Downey says: “LV=’s long-term with-profits payouts continue to be among the best-performing in the market.”
Aviva and Prudential have already cut annual bonus rates on with-profits policies this year, while Friends Life increased or held payouts for most of its 1.7 million clients.
AWD Chase de Vere head of communications Patrick Connolly says: “Most bonus rates have been maintained by LV= but long-term payout returns are still on a downward spiral.”