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ScotLife payouts rise despite lower terminal bonuses

Scottish Life is increasing with-profits payouts following the transfer of

its business to new owner Royal London although terminal bonuses have


The transfer was completed on July 1. ScotLife increased bonuses in the

period before the transfer to give fair treatment to policies maturing

ahead of completion of the deal.

Terminal bonuses are lower than their pre-completion levels but increased

reversionary bonuses mean overall payouts are up by 2 per cent.

The terminal bonus on a 10-year individual life policy which matured on

July 1 this year is down to 27.5 per cent from 30 per cent declared in

March. On a regular-premium pension, the terminal bonus after 10 years has

fallen to 32.5 per cent from 35 per cent.

But the maturity payout on a 10-year endowment is £9,329, up from

£9,134 in March, based on a male aged 30 paying £50 a month. On a

25-year endowment, the payout is £109,336, up from £104,146.

Head of communications Alasdair Buchanan says: “With-profits endowments

continue to provide satisfactory returns. The real rate of return for one

of the 20-year policies from ScotLife is over 8 per cent a year compound,

even without allowing for the cost of life cover.”


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The Merchants Trust PLC – April 2017

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