Prudential will not be cutting final bonuses for its with-profits fund, though annual rates will fall by around 0.75%, it has confirmed today.
Policyholders will see the accumulating value of their policies fall by between 6% and 10% as smoothing measures adjust to the market downturn.
Around £2.8bn was added to policy values through bonuses in 2008, with total returns of the Prudential with-profits fund at 67.2% over the past ten year.
Bonus rates will be set at 3% for with-profits bond and personal pension policies and 2% for annuity customers.
Other with-profits providers have been forced to cut their final and annual bonus rates due to the market downturn, despite the smoothing measures used to protect policyholders from the poor economic situation.
David Belsham, chief actuary at Prudential, says: "Although investment markets have performed very poorly in 2008, our policyholders have been protected from the full impact of the market falls and will typically see a reduction of between 6 per cent and 10 per cent in their accumulating with-profits policy values.
"In such exceptional market conditions, this compares very well with many directly exposed investment options available to customers."
Contact: John Bakie, Tel: 020 7484 9805, e-mail: [email protected]IFAonline
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