Norwich Union has reduced the fund and transfer values on all its conventional with-profits funds by up to 9%, it has been revealed.
The Aviva-owned insurer, which also made a smaller cut in December, made the move in May after its internal fund valuing index recorded a drop of around 5%.
The firm, which says the re-value will only affect those policyholders wishing to transfer or take benefits early, says it was “more than we wanted to do”.
The cut affects all four of Norwich Union’s with-profits funds: CGNU, CULAC, Norwich Union Life and Pensions, and Provident Mutual. No other policy types have been affected.
Norwich Union would not confirm the exact drop in fund and transfer value, saying it may have been as high as 9% on one fund but was more like 7% or 8% across the board.
It is uncertain the exact number of policyholders affected but Norwich Union says: “It’s quite a small element of our total business but it’s not an insignificant amount.”
It adds the decision could also impact bonuses which have been applied to those policies maturing next year.
A spokesman for Norwich Union says: “We have an ongoing review of our surrender value and transfer value for our conventional pensions and there was a change to the surrender and transfer value at the end of April and at the end of December.
“It is all part of an ongoing review. We review the level of the markets on a regular basis, and there is a trigger point. It fell in value by 5% from our own internal index, which we have for each with-profit fund.”
Norwich Union says its aim is to always “pass on the value of the assets”.
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