Standard announces reduced bonuses
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Your support makes all the difference.Standard Life, the leading mutual insurer, yesterday announced reduced terminal bonus rates on its endowment and with profits pension policies A 25-year endowment policy at £30-a-month maturing on 1 February will pay £62,080 compared with £63,832 a year ago, down 2.7per cent, while the value of a comparable 10-year policy drops 5.2 per cent to £6,136.
Cuts in bonuses, reflecting the contraction between the insurer's investment performance and the amount it has guaranteed to pay policyholders, have dogged the industry over the last four years. Standard followed the other leading life offices in blaminglacklustre equity markets. Jim Stretton, chief executive of UK operations said: "Market returns on our with-profits funds were lower than in many recent years.''
The company said that the net returnhad averaged out at 10.5 per cent for a 10-year with-profits policy and 13.2 per cent over 25 years in the year to November 1994. It compared that with an average annual inflation rate for the period 4.4 per cent and 7.6 per cent respectively.
Standard declared an unchanged growth rate of 8.5 per cent for its unitised with-profits life and pension policies. Reversionary bonuses for traditional with-profits policies - paid annually and once added to a policy cannot be taken away - were declaredat last year's interim rate of 4.5 per cent.
The £62,080 maturity value of Standard's £30-a month, 25-year endowment policy compares with £64,798 at Commercial Union, £64,070 at General Accident, £59,687at Scottish Life and £55,136 at Norwich Union.
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