Scottish Friendly is the latest provider to announce its decisions on with profits bonus rates.
Whilst annual bonuses will remain at the same level as 2003, terminal bonuses will fall from 2.5% to 1.75%. According to Scottish Friendly, the reduction in terminal bonus will mean lower payouts of around 5.5% for 10-year policies and almost 12% for 25-year policies.
Our View
With profits declarations are a very mixed bag at the moment. We would have expected Scottish Friendly to leave terminal bonuses alone and follow suit with at least one other friendly society.
As with all providers, the bonuses on offer will reflect the actual performance of the underlying investments. If Scottish Friendly did not have as good a year as other providers, their bonuses will be lower.