Legal & General and Prudential have added to the stable of the insurance giants making moves to cut annual with profits bonus rates for the investment year 2001. Many rates have been cut by between 11% and 25% on life policies and maturity payouts by more than 15 per cent.
In real terms these are cuts of anything between 0.5% to 2% on annual bonuses and reflect the extremely poor investment climate in 2001. These cuts are not as heavy as some other offices. This is probably reflected in the fact that they do not have as far to come down. Tip: some offices do offer higher headline bonuses to attract you and then, when they have you, they cut back.
Beware headline rates. When 'push comes to shove', they are all investing in the same markets and experiencing similar poorer underlying investment performance which supports these rates.
Most life offices are making the same sort of cuts but are keeping a low profile. Look at your bonus statements when you receive them. Don't just file them away!
If you are not sure about what to do or what you have - contact us for help.
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