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Payouts cut again by R&SA

Royal & Sun Alliance policyholders have been dealt ano-ther blow

with payouts on long-term savings plans slashed again, this time by

around 10 per cent.

The changes, effective from May 1, are the second change this year.

In January, R&SA made a 5 per cent cut which followed 15 per cent

reductions which were made last year.

Now a 25-year endowment policy with a monthly pre-mium of £50

will pay out £59,635 compared with£66,262 previously.

A 20-year individual pension plan for a male retiring at 65 with a

premium of £200 a month will now pay £126,472, compared

with £139, 988.

UK life PR manager Jay Aitken says: “You have got to look at annual

returns on longer-term policies. They are still competitive. The

25-year endowment still has an annual return of 9.7 per cent.”

Wentworth Rose managing director Philip Rose says: “I believe there

is little incentive for companies such as Royal & Sun Alliance

which have closed their books to new business, to maintain

competitive rates in the future and believe they will drift to the

bottom, which is a serious concern for policyholders.”

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