View more on these topics

NU with-profits bonuses cut by up to 19 per cent

Norwich Union has become the latest life office to slash annual bonus rates, hitting some with-profits policies with cuts of up to 19 per cent.

The news comes after Scottish Widows admitted that it was reducing bonuses on its savings policies by around one-third.

NU says it will cut bonuses on savings policies to 4.25 per cent from 5.25 per cent and on personal pension policies to 5.25 per cent from 6.25 per cent.

It blames the reductions, which will affect more than three million people with former General Accident, Commercial Union, CGU, Norwich Union or Provident Mutual policies, on poor investment returns following the 16 per cent fall in the FTSE 100 index last year.

It had projected a positive return on its with-profit funds of 7.25 per cent during 2001 but the return was -9.6 per cent. NU says investors should not be deterred from taking out with-profits policies despite the latest round of cuts.

Chief actuary Mike Urmston says: “The very poor performance of the stockmarkets has had a direct impact on the value of with-profit funds and this has to be reflected in bonus rates and payouts. However, we see no reason why with-profits should not continue to provide attractive returns to both new and existing policyholders.”

Roberts Clark director Jo Roberts says: “I am slightly surprised that NU did not make bigger cuts but I think it was a strategic decision.

“They probably wanted to ensure that investors do not walk away from them and that they look good against Scottish Widows. I am certain they want the number one spot in the tables.”


True or false with-profits?

Fans and opponents of with-profits will remember 2001 as the year that the subject emerged from the shadows into the full glare of the spotlight.Following a series of papers, reviews and consultations (and with more to come in 2002), changes to with-profits as we currently know it are certain to follow.The year was not very […]

Commission cap would solve all the FSA&#39s concerns

I have now read the report off the FSA website and it appears to me that the one concern which came across from it was that some IFAs are influenced by commission amounts available from the product providers.That, to me, is all there is to it. So why they have spent so much time and […]

Momentum teams up with PMI consultancy SPS Wellbeing

Corporate IFA Momentum Financial Services is teaming up with private medical insurance consultancy SPS Wellbeing to expand its advice offering.The strategic partnership will enable Momentum, one of the UK&#39s 20 largest IFAs, to offer specialist advice on health benefits as well as its core business of pensions, investment and tax.

A capital idea

I am a higher-rate taxpayer with a capital gains tax liability arising this year. I have heard people talk about various tax-saving schemes and wondered if you could briefly outline the main schemesand explain how thetax reliefs work. During the 1990s, a number of initiatives were enacted to encourage investment into qualifying unquoted companies. These […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm