View more on these topics

LV= with-profits investment returns hit 11%

LV= has held or increased annual bonus rates for over 700,000 with-profits policyholders as investment returns surged during 2013.

The mutual insurer’s 2013 with-profits performance statement, published this morning, reveals the LV= with-profits fund delivered investment returns of 11.1 per cent last year.

Annual bonus rates range from 0 per cent to 6.17 per cent depending on the policy taken out.

Annual bonuses on the pension income plus annuity, which remains open to new business, increased from 2.25 per cent in 2012 to 4 per cent in 2013.

Final bonuses, which are paid out when the plan reaches maturity, vary from policyholder to policyholder.

An announcement regarding LV=’s mutual bonus payment, which is set on a discretionary basis depending on how the company has performed during the year, will be made on 31 March.

LV= group finance director Phillip Moore says: “With-profits remain an attractive investment proposition for certain market segments and we are committed to offering great returns to our customers. 

“This excellent performance and the possibility of additional mutual bonuses continue to benefit existing with-profit members as well as for our new propositions – our pension income plus annuity and our flexible guarantee bond.”

Recommended

DWP-Department-Work-Pensions-700x450.jpg

DWP appoints new Pensions Regulator chairman

The Government has appointed former banker Mark Boyle as chairman of The Pensions Regulator. Boyle, who has held senior roles at Lloyds Bank and Kleinwort Benson, will succeed Michael O’Higgins in the role from 1 April. Boyle is currently non-executive chairman of HM Land Registry and was previously director and chief operating officer of the […]

George-Osborne-19-March-700.jpg

Chancellor George Osborne reveals ‘unprecedented’ pensions overhaul

The Government has announced a radical overhaul of pension rules which will mean that from April 2015 anyone over the age of 55 will be able to take their entire pot as cash. Delivering his Budget speech this week, Chancellor George Osborne said the changes will be “the most far-reaching reform to the taxation of pensions since […]

RBS-logo-700x450.jpg

Moody’s downgrades RBS over restructure concerns

Ratings agency Moody’s has downgraded Royal Bank of Scotland’s credit rating and placed it on a negative watch over concerns about the bank’s restructuring programme. In January, RBS announced a pre-tax loss of £8.2bn for 2013 and announced a five year plan to make the business a UK focussed retail bank and move out of […]

Get your New Year off to a flying start

Ross Jackson, Senior Marketing Manager There’s no denying that these days we expect things quickly. You might have noticed it first-hand during the flurry and rush of the Christmas period. The fact is that in a world of smartphones, social media and click and collect, most clients expect to get an instant response and a […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Can someone please explain how an 11.1% investment performance can result in a 4% bonus rate for their with profits annuity?

    This cannot simply be smoothing, as last year a 9.9% investment return resulted in a 2.25% bonus.

  2. @ John.

    It is partially smoothing, most of these funds are still recovering from their very poor returns from 2007 – 2011. The rest of the explanation lies in LV deferring more of the bonus payments as terminal bonus rather than regular bonus.

    Regardless, there are no shareholders at play, so all of the money has to make its way to policyholders eventually anyway.

Leave a comment