Standard Life freezes with-profits bonus rates
Standard Life has frozen bonus rates for over a million unitised and conventional with-profits policyholders.
The life and pensions provider says most customers will still see an increase in their plan values but for the less fortunate, a £200 a month with-profits pension plan taken out in 1990 by a male retiring aged 65 now has a maturity value of £82,301, down from £87,095 a year ago.
Plan values depend on investment returns on the assets in a with-profits fund and the firm’s communications manager, Margaret Flaherty, explains: “While returns from equity markets have improved they are still some way off recovering from the preceding downturn.”
Meanwhile, other classes of investment such as fixed interest and property delivered lower returns in 2009 than equities.
The life assurer has also announced that fewer unitised with-profits plans now have market value reductions (penalties due if cash is withdrawn early) and, where the reductions remain, they are generally smaller than before.
Earlier this month, Aviva reported that bonus rates on its ex-CGNU policies have been reduced by 0.5%.
The group excused itself by saying the move brought guarantees on the policies into line with the actual long-term performance of its with-profits fund.
Category: Insurance News, Standard Life News
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