Standard Life has reduced annual bonus rates for 600,000 with-profits savers although the provider points to decent investor returns in 2012.
Because the value of any bonus increase is guaranteed, many providers have sought to freeze or reduce these payments in recent years.
Last year, a number of major insurers, including Aviva, Legal & General and Standard Life, either held or cut annual bonus rates for their policyholders.
Standard Life last week announced a cut in bonus rates on unitised life plans from 0.75 per cent to 0.5 per cent and on unitised pension plans from 1 per cent to 0.5 per cent.
A spokeswoman says around 600,000 people will be affected by the decision, which has been made to give the provider greater investment flexibility.
As an example, it says its Heritage investment fund delivered 7.9 per cent during 2012.
Annual bonuses on the Standard Life with-profits bond have been held at 2.5 per cent.
Standard Life with-profits communications manager Margaret Flaherty says: “We are pleased to say that customers have seen a year-on-year increase in the value of their plan.
“In the last year, a typical pension customer has seen a return of 7 per cent on their plan while a typical endowment customer has seen a return of 5 per cent.”
This follows a warning from independent consultant Ned Cazalet that annual bonus rates will be close to zero in 2013.
AWD Chase de Vere head of communications Patrick Connolly says: “A lot of providers have cut with-profits bonuses repeatedly in the last 10 years and that trend shows no sign of stopping. But that does not mean
people should abandon their policy because they may have valuable guarantees or be hit by high exit penalties.”