Investors in the Scottish Widows Flexible Options growth fund should receive a regular bonus rate of...
Investors in the Scottish Widows Flexible Options growth fund should receive a regular bonus rate of 4% on their with-profits investment, but all other with-profits policies will see a cut in bonus rates as well as well as a possible Market Value Reduction of 25%.
Details of the latest changes to payments indicate that the investors holding the Flexible Options bond income fund will now receive regular bonuses of 3.75%, down 1% from 4.75%, while most other unitised with-profits life and pensions will receive a reduced bonus of anything between 1% and 2.5%, depending the product selected.
Scottish Widows points out that it has also cut its MVR from 0-28% to 0-25% on unitised pensions and 0-27% to 0-23% on unitised life assurance policies.
However, this is still substantially higher the 9% MVR which Norwich Union imposes on its with-profits plans.
|Product Category||Bonus Rates p.a.|
|Flexible Investment Bond||2.00%|
|International Investment Bond (Sterling)||2.50%|
|International Investment Bond (Euro and Dollar)||2.25%|
|Other life-fund policies||1.00%|
The Flexible Options growth fund has managed to maintain a better return that other with-profits funds because it is still relatively young - having only been launched a year ago - and is made up of around 85% equities and property as well as guaranteed benefits in a separate account.
MVR will be set per policy, according to length of time held, amount invested and target maturity date.
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