The firm has poured in £2.8bn to smooth the fund. Policyholders will see a typical reduction of between 6 per cent and 10 per cent in their accumulating with-profits values.
Prudential will pay annual bonuses worth £1.3bn with rates set at 3 per cent for most with-profits bonds and personal pension policies compared with 3.5 per cent last year and 2 per cent for Prudential sold annuity customers compared with 2.75 per cent last year. It will pay out £1.5bn in final bonuses.
A policyholder with a 20-year term personal pension paying £200 per month will have seen a 9.3 per cent drop in their claim value, from £103,581 in 2008 to £96,238 this year. Meanwhile a mortgage endowment policyholder with a 25-year term paying £50 per month will have seen their policy value decrease 6.1 per cent, from £39,569 to £37,738 in 2009.
Chief actuary David Belsham says: “Although investment markets have performed very poorly in 2008, our policyholders have been protected from the full impact of the market falls and will typically see a reduction of between 6 per cent and 10 per cent in their accumulating with-profits policy values. In such exceptional market conditions, this compares very well with many directly exposed investment options.”