Royal London is bucking the downward trend of bonus declarations and raising its ret-urns on the back of cost savings of £250m from the acquisition of the United Assurance Group.
Most life offices have cut bonus rates, blaming poor stockmarket performance. Royal London says the £1.5bn acquisition of United Assurance last April achieved considerable cost savings, allow- ing additional one-off bonuses.
On a 25-year endowment policy paying £50 a month, the payout rises to £127,005 from £120,369 last year.
Royal London says this additional bonus is a one-off and it expects annual bonus rates to fall in the future.
It intends to make future bonus statements clearer, explaining fund performance and how returns on with-profits policies are smoothed.
Chief executive Mike Yardley says: “The additional bonus represents a tangible return to policyholders from our acquisition of United Assurance.
“That acquisition has helped the group achieve substantial reductions in operating expenses and the benefits are now flowing through to policyholders.”