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Prudential slashes final bonuses on with-profits

Prudential has announced that it is reducing final bonus rates on its with-profits policies in response to the sustained downturn across world markets and the continuing poor investment environment.

It has also announced that there will be no change to the firm’s approach to MVRs although this is reviewed regularly in the light of emerging market conditions.

Prudential chief actuary David Belsham says: “Today’s change reflects the consistent way in which we have managed the Fund to ensure a fair approach to the setting of bonus rates. In an environment where markets have fallen significantly, our policyholders have benefited from the downside protection provided by our Fund. This demonstrates the benefit of being invested in Prudential’s strong with-profits fund which is supported by an inherited estate of £6.2bn as at September 30”.

He adds that the move is prudent and will ensure the continuing long-term strength of the Fund and protect the ongoing interests of Prudential’s long-term customers.


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Imagine the hypothetical Smith family sitting at home in their 3 bedroom house in middle En`gland. They had a 70 per cent mortgage on their home a year ago but house price collapses of the past year have eroded much of this cushion. Unfortunately, their existing fixed rate deal came to an end this summer. They received a letter from their lender which politely suggested they look elsewhere for a new mortgage as the new rate they could offer the Smiths had increased dramatically.


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