Scottish Widows has maintained its bonus rates on the majority of with-profits policies but the market value reduction has been cut by an average 3% on the back of improved investment performance.
As of July 1st, says life insurer, “cash-in” values have increased by 3% on last year, along with final bonus rates while the average MVR has dropped from 9% in June 2004 to 6% on unitised pensions and life policies.
This is because the with-profits fund managed to double its investment return over the 12 months, to achieve a pre-tax investment return of around 15% from June 2004 to June 2005.
That said, the market is still 20% lower than it was in 2000, points out Adrian Eastwood, actuarial director at Scottish Widows.
Asset mix of the fund has seen a small return to equities over the 12 months as the with-profits fund has increased its holding in UK equities from 35% to 38% and overseas equities weighting has grown from 7% to 9%.
There is now a reduced weighting in the fixed interest sector, down from 39% last June to 31% this year, along with 11% in property and 11% in cash, compared with 7% in June 2004 and 6% in December 2004.
The dollar-denominated international investment bond (IIB) is one of the few products to see an increase in its regular bonus payout as this has risen by one-third compared with last year to 3%.
According to Scottish Widows, a 25-year £50-a-month mortgage endowment held by a 29-year old non smoker male at outset will pay £41,017, which is said to be £9,814 over its target.
Similarly, a £200 a month personal pension taken out in July 1985 will pay £94,558– almost double the premiums paid – to give a yield per annum of 6.3%.
|30 June 2004||31 December 2004||30 June 2005|
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