Norwich Union is slashing its bonuses for with-profits endowment policyholders.
The annual bonus on the sum assured on a conventional savings endowments is being cut from 2 to 1.5 per cent. The bonus on previous annual bonuses falls from 3.25 to 2.75 per cent.
A person cashing in a 10 year £50 a month policy taken out at the age of 29 would now receive £9,479 this year compared with £9,929 for an identical policy a year earlier.
NU group chief executive Richard Harvey says: “Customers whose policies mature in 2000 are enjoying returns well above the rate of inflation.”