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Standard cuts bonuses but only by average of 8%

Standard Life has moved to secure its place among the top-performing life offices by cutting reversionary bonus rates by significantly less than its competitors.

Standard has reduced bon-uses by an average of 8 per cent across many schemes and kept rates for its traditional with-profits policies at the same level as last year.

The move eclipses Scottish Widows and Norwich Union, which have slashed bonuses on some policies by 33 per cent and 19 per cent respectively. Royal & Sun Alliance has also warned it is likely to make significant cuts.

Bonuses on Standard&#39s endowment policies remain unchanged at 2.25 per cent on sums assured and 3.5 per cent on existing bonuses. Bonuses on individual pension plans will stay at 3 per cent both on sums assured and bonuses.

Standard says its decision not to make huge cuts leaves it well placed in relation to other life offices and believes it demonstrates the extent of its financial strength and the advantages of mutuality.

Group finance director John Hylands says: “Which-ever way you look at our ret-urns, they stack up extremely well. A with-profits investment with a strong well run mutual offers excellent prospects for market-leading returns.”

Informed Choice managing director Nick Bamford says: “I cannot say the figures made me leap out of my chair with shock but they are a good indication of Standard&#39s strength. They should leave it right up there in comparison with the others.”

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