Prudential is to protect bonus payouts on new with-profits business from suffering the effects of p...
Prudential is to protect bonus payouts on new with-profits business from suffering the effects of previous poor investment conditions.
Total bonuses on all accumulating with profits products purchased since the spring of 2002 will benefit from bonuses based solely on the performance of the fund since that date.
The announcement aims to remove the concern of Prudential customers that investors going in to with-profits today will suffer reduced bonuses as fund financial strength is rebuilt following a period of low market returns and overpayment of bonuses.
The Prudential said that existing holders of accumulating with-profits products would also gain in respect of premiums paid from spring 2002. In total, the life office estimates this will benefit 1.25 million customers.
Meanwhile, in its half-year announcement, the company said there would be no reduction in bonus rates. In current market conditions, the existing Pru Bond bonus rate of 3.25%, announced in February 2003, is expected to be maintained until the date of the next full year bonus review in early 2004. The downturn in investment returns over recent years, as experienced by customers in the form of interim bonus announcements during 2002, has evened out and hence no interim bonus declaration is currently required, it said.
Partner Insight Video: Advisers have had to adapt to the changing investment landscape.
Investment trust savings scheme