Legal & General announces continued growth for with profits customers
Legal & General today announced another year of growth on the assets held for their with profits policyholders with a return of 3.1% (before tax) for the 12 months to 31 December 2015.
The company added bonuses worth £366 million to its with profits policies last year. This is lower than the £387 million added in 2014, reflecting a gradual reduction in the number of customers as policies continue to mature.
Long-term returns continue to be well above inflation…
Over 25 years the assets held on behalf of Legal & General’s with profits policyholders have returned 8.5% per annum before tax and over 10 years the annual return is 5.5% before tax. This has exceeded the return on an average balanced managed fund and continues to be more than the average inflation rate over the same period, based on the Retail Prices Index (RPI).
|Single Premium Investment||Return per annum over 10 years||Return per annum over 25 years|
|Legal & General With Profits||5.5% (before tax)||8.5% (before tax)|
|Average balance managed fund*||4.9% (before tax)||7.4% (before tax)|
|Retail Prices Index Inflation (RPI)||3.0%||2.8%|
* Source: ABI UK Balanced (mixed investment 40-85% equity) fund
Commenting on our 2015 with profits performance Jackie Noakes (photo, left), Managing Director Savings, Legal & General Assurance Society said: “One of the main advantages of a with profits investment is the ability to protect our customers against short-term market volatility by ‘smoothing’ payouts. 2015 was a challenging year for investment markets but we have actively allocated the fund across a broad spread of assets achieving another year of positive returns. This means that our with profits customers continue to see steady growth on their investments over the long-term, well in excess of inflation.”
Following the closure to new business of the With Profits Fund on 31 January 2015, the fund continues to maintain a broad mix of assets, very similar to the asset allocation of the previous year.
Asset allocation for With Profits Growth Bonds, With Profits Endowments and With Profits Pensions
|As at 31/12/2015||With Profits Growth Bonds and Endowments||Unitised With Profits Pensions
(up to 31/12/1994)
|All other With Profits Pensions*|
|Fixed interest securities||38%||53%||48%|
*Excludes With Profits Annuities and AF4
For more information please contact:
Head of Group Corporate Communications
FOR EXAMPLES OF INVESTMENT VALUES PLEASE SEE BELOW.
|10 Year Return for £10,000 invested in a Legal & General With Profits Growth Bond|
|Date of investment||Cash-in value as at 19/2/2015||Cash-in value as at 18/2/2016||Return over year||Return per annum|
|Invested on 18 Feb 2006||£13,324||£13,704||2.9%||3.2%|
|25 year mortgage endowment maturing on 1 March 2016: (male aged 29 at entry)|
|Payment||Total paid||Cash-in value as at 1/3/2015||Maturity value as at 1/3/2016||Return over year||Return per annum|
|£50 per month level premium||£15,000||£24,418||£25,170||0.6%||3.9%|
|Value of With Profits Pensions for a male retiring at age 65, paying monthly contributions of £200|
|Plan Term||Transfer value as at 1/3/2015||Total payments since 1/3/2015||Retirement value as at 1/3/2016||Return over year||Return per annum|
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