Payouts on pension policies maturing in October 2002 will be reduced by up to 15% and life policies will drop by 12.5%.
The return on a 20 year, £200 a month regular premium pension maturing on 1 October 2002 is 11% per year, including bonuses. A 20 year, £20 per month regular premium AMP Pearl endowment maturing at the same time shows a return of 9.4%.
The managing director of AMP UKFS, Tom Fraser, said that these returns show good returns after inflation and tax on with-profits policies. Comparable inflation over the last 20 years has been 3.4%.
Mr Fraser added that the bonus reductions are a prudent step taken to ensure that future returns to all policyholders are fair.
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