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Pru cuts terminal bonuses again

Prudential has cut terminal bonuses on with-profits policies by around 7 per cent with immediate effect.

The life office blames troubled stockmarkets for its third bonus rate cut since February and the second in two months.

Typical maturity values on Prudential and Scottish Amicable pension, investment, savings and mortgage endowment policies have fallen by 12 per cent this year against a decline in the FTSE 100 of more than 20 per cent to the end of November.

The impact on individual policyholders will depend on the type of product and length of time it has been in force. Annual bonuses remain unchanged.

A personal pension policyholder paying £200 a month over 10 years will see a fall in the maturity payout to £32,487 from £33,707. The payout on a £10,000 investment into a Prudence bond over 10 years will be cut to £20,916 from £22,415.

Prudential UK and Europe chief executive Mark Wood says: “This is a prudent move to protect the strong financial position of the fund and the interests of our ongoing customers. It is the right course of action to take at this time.

“Customers can be reassured that our with-profits fund has outperformed the market and is providing them with solid returns compare to other investment options.”

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