AMP's half-year profits for the UK business rose to £64 million from £60 million. Despite this, AMP Pearl have announced cuts by 12.5% for payouts on with-profits life policies and 15% on with-profits pensions.
AMP says that the move is in line with what other companies are doing at present, although the Pearl does not permit reductions due to poor market conditions (Market Value Reductions). AMP acknowledge, however, these cuts could be seen as a market value reduction through the back door.
It has injected £400 million into the UK business and the Pearl with profits fund has now reduced its equities exposure to 35% of the overall fund. A spokesman for AMP said that the half-year results are good, considering how tough the market is at present. Even if the FTSE fell again as much as it has, AMP says they would still be solvent and have access to its Australian parent that can raise capital.