Aviva almost maintains regular bonus rates

by Gill Montia

Story link: Aviva almost maintains regular bonus rates

Aviva has published details of its regular bonus rates for 2010, saying “despite the volatility of investment markets over the past two years, the vast majority of regular bonus rates have been maintained”.

According to the insurer, its with-profits funds continue to give consistent and stable returns.

For example, a customer who invested £10,000 five years ago in an investment bond would have seen a return of 23.9%, equivalent to 4.4% per annum net of basic rate tax, which compares favourably to an average savings account returning 13.8%, or 2.6% per annum.

However, while regular bonus rates for unitised policies and offshore bonds have been maintained, with-profit income rates have reduced from 3.25% to 2.50%.

In addition, bonus rates on ex-CGNU policies have been reduced by 0.5% to bring the guarantees on these policies into line with the actual long-term performance of the fund.

Aviva’s chief operating officer, David Barral, says: “The vast majority of customers who have invested in the Aviva with-profit funds have received higher returns than if they had invested in an average bank or building society account and have been protected against the full impact of volatile investment markets.”