View more on these topics

Pru boosts with-profits final bonus payouts but returns slump

Prudential-Logo-700x450.jpg

Prudential has maintained total annual bonus payouts across its with-profits funds at £600m as investment returns slumped to 3.2 per cent during 2015.

Total final bonus payouts – which are paid when the policy reaches maturity – edged up from £1.3bn in 2014 to £1.4bn last year.

Annual investment returns were down, however, from 7 per cent in 2014 to 3.2 per cent last year.

Despite this, the insurer says the fund has delivered cumulative investment returns, before charges and smoothing, of 80.8 per cent over the last 10 years, beating the FTSE-All Share (total return) figure of 71.8 per cent for the same period.

Prudential has around 4 million with-profits policyholders.

Prudential UK & Europe chief financial officer Aki Hussain says: “We have been able to deliver competitive annualised returns for our customers, in spite of the combined pressures of volatile market conditions and persistently low UK interest rates.

“This result demonstrates, yet again, that investing in a financially strong and well-managed with-profits fund can produce consistently strong returns for investors over the medium to long-term. The with-profits smoothing approach has also reduced the full impact of the volatile market conditions in 2015 on policy claim values.”

A 29 year old male who paid a £10,000 single premium into a 20-year Prudential With-Profits Prudence Bond would have enjoyed annualised returns, net of tax and charges, of 5.6 per cent, the firm says.

Likewise, if the same individual made regular premium payments of £200 per month into the Prudential With-Profits Individual Pension over 20 years they would have experienced returns of 5.3 per cent a year.

Recommended

Tyrie-Andrew-2012-700x450.jpg

Andrew Tyrie condemns Treasury over OBR interference

Treasury committee chairman Andrew Tyrie has condemned attempts by the Government to make non-factual changes to reports from the Office for Budget Responsibility. Reports emerged in mid-September that Treasury officials had asked the OBR to alter the wording of its independent forecasts, including requesting the removal of references to “steep cuts”. While the phrase was […]

Business-Portfolio-Pen-Paper-700x450.jpg

Lighthouse profits up 50% but costs bite

Lighthouse Group has reported a 50 per cent increase in its pre-tax profits for 2015 but operating costs rose amid regulatory pressures. Profit before tax was up from £600,000 in 2014 to £900,000 at the end of 2015. Revenues were also up 4 per cent from £47m to £49m with half of the total figure generated […]

What triggers the MPAA?

Jim Grant – Senior Product Insight & Technical Support Analyst There’s sometimes confusion around what triggers the money purchase annual allowance. Find out what does and what doesn’t trigger the MPAA. The money purchase annual allowance (MPAA) is a reduced annual allowance that can apply to contributions to defined contribution (DC) schemes. The following table […]

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. Why are these people quoting returns before charges and smoothing?

    The returns are utterly misleading

  2. Presumably charges and smoothing applied would depend on what product you had and what payment options you chose (going by the net 20 year figures in the examples lower down).

Leave a comment