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Standard Life announces extra £800m of with-profits bonuses

Standard Life has announced that an estimated £800m of bonuses will be added to its with-profits plans in 2008.

Its with-profits bonus declaration states that bonus growth rates for unitised with-profits bonds will increase from 2 to 2.5 per cent per annum and from 1.5 to 2.0 per cent for other life plans.

Standard Life says where the 3 per cent guarantee applies, unit prices will continue to grow at 3 per cent per annum.

Bonus growth rates for unitised with-profits pension plans will increase to 2.5 per cent per year, up from 2 per cent, except where a 4 per cent unit price growth guarantee applies.

Standard Life Assurance Limited actuarial director Jim Black says despite the volatility of 2007, payout values for all types of with-profits plans have increased over the last year.

He says: “This demonstrates the benefits of being invested in with-profits which, through the smoothing of investment returns, can help to shield customers from the worst impact of short-term market upheaval.

“With-profits customers are also benefiting from continued distributions from the Inherited Estate in the form of enhanced payouts for those plans which are eligible. Consequently, all types of with-profits plans have benefited from positive returns during 2007.”

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