Second year of double-digit returns for with profits fund drives strong final bonus rates for with profits maturities at Legal & General.
17 February 2011
Over the past 10 years, assets invested for customers in Legal & General’s with profits fund have returned 59.8 per cent before tax. This is well ahead of inflation as the Retail Prices Index has risen 32.6 per cent over the same period and compares favourably with the average balanced managed fund return of 40.2 per cent before tax*.
25 year mortgage endowment policies maturing in surplus
The company says this means final bonus rates will deliver payouts ahead of target for a typical 25 year mortgage endowment policy maturing on 1 March.
|Monthly payment||Target amount||Value at maturity||Surplus|
|£50 per month||£34,378||£34,750||£372|
|£100 per month||£69,100||£69,843||£743|
|£150 per month||£103,822||£104,940||£1,118|
Legal & General has approximately 660,000 With Profits customers and approximately 38,000 endowment mortgage policies will mature in 2011.
With Profits Bonds have seen a strong increase in value over 2010.
£10,000 invested in a With Profits Bond 10 years ago has a cash-in value of £13,326 today.
This represents an increase in cash in value of 11.9 per cent versus the cash in value a year ago. Over the last year MVRs have been reduced for bond customers on our With Profits Income Bonds and With Profits Growth Bonds.
Carl Dowthwaite, With Profits Actuary said: “With profits savers benefit from the opportunity to invest in a broad spread of assets, which can help to reduce risk. All of the major asset classes held in our with profits fund have performed well during 2010 with particularly strong returns in commercial property and equities. These returns demonstrate the benefits of investing with a leading with profits provider. We are pleased that our customers have benefited from the strong recovery in asset values seen over the last two years.”
* Source: Lipper for Investment Management
Further examples of investment values please see Appendix One below.
|Plan Term||Transfer value as at 1/3/2010||Total payments since 1/3/2010||Retirement value as at 1/3/2011||Return over year|
|Date of investment||Cash-in value as at 18/2/2010||Cash-in value as at 18/2/2011||Return over year|
|18 Feb 2001||£11,909||£13,326||11.9%|
|18 Feb 2006||£10,054*||£11,307||12.5%|
*This value is quoted before a 2% charge that applies. This charge is designed to recover initial costs, and is therefore excluded when measuring investment returns over the year.
Notes to editors
- The return generated in 2010 is on total assets backing With Profits policies and is stated pre-tax and charges. Returns generated for the assets underlying individual products may differ from this value.
- Assets under Administration grew by 3 per cent to £22.1 billion as at 31 December 2010. Legal & General has approximately 660,000 With Profits customers, spread across pensions, annuities, endowments and other savings products.
- The asset allocations for the major product classes at 31.12.2010 were as follows;
|Asset allocation as at 31.12.2010||With Profit Growth Bonds||With Profits Endowments||With Profits Pensions|
|Fixed interest securities||38%||38%||48%|
For more information please contact:
PR Manager Savings
t: +44 (0) 1737 375365
m: +44 (0) 7802 503917
About Legal & General
Legal & General Assurance Society Limited.
One Coleman Street
London EC2R 5AA.
Registered in England 166055.