Scottish Widows has cut the regular bonus rates on a number of its with-profits funds by 0.5%-1% and...
Scottish Widows has cut the regular bonus rates on a number of its with-profits funds by 0.5%-1% and reduced market value reductions (MVRs) for all products to which they currently apply.
The regular bonus rate for new business into the Flexible Options Bond Income fund has been reduced to 3.75% from 4.75%. The rates on other unitised with-profits life and pension policies have generally been cut by 0.5%.
Final bonus rates on with-profits policies have also been reduced. Scottish Widows chief executive, Mike Ross, said the cuts are due to a reduction in investment returns, despite some modest recovery in equities in recent months.
The Flexible Options Growth has bucked this trend, with its regular bonus rate increasing from 3% to 4% following the recovery in equities since the fund was launched in mid-2002.
The group has also cut MVRs on unitised with-profits pension policies from a maximum 28% to 25% and those on unitised with-profits assurance policies from 27% to 23%.
Ross said the revised MVR rates, which apply from 1 July, were made possible by the slight recovery in the FTSE 100 index.
Full details of bonus rates and MVRs are available on www.scottishwidows.co.uk.
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