Liverpool Victoria has removed terminal bonuses on its savings schemes this year. Despite returns of 20.1% in their with-profits fund in 2005, and having one of the strongest financial strength ratios in the with-profits industry, the provider has completely scrapped its' terminal bonus, which was expected to be more than 20% of the investment total in its 2006 bonus rate.
Liverpool has defended their decision, saying it was 'not in keeping with its history, but the right decision, given market decisions'.
Our view
This is a surprise but no doubt the actuaries have made their usual calculations. It may be that given that they have declared slightly higher yearly bonuses over the last few years and as such there are no 'profits' left for any final/terminal bonuses.