Royal & Sun Alliance has made emergency cuts to annual bonus rates on its unitised with-profits by 1 per cent and payouts on its conventional with-profits by 10 per cent.
Cutting annual bonuses mid year is very unusual – in 2000 Equitable Life cut its annual bonus altogether and is unlikely to reinstate it.
R&SA UK Life public relations manager Jay Aitken says: “It really reflects the difficult market conditions. It is important that bonus rates reflect the low inflation, low interest environment.
“We are not cutting terminal bonus on unitised with-profits. Cutting annual bonus gives us more flexibility as annual bonus has to be reserved for.”