Royal London is following in the footsteps of many other insurers and is cutting payouts on with profits policies. The Royal London Group announced cuts of 24% and 19% in payouts for Scottish Life and Royal London with profit policyholders, respectively.
Many questions have been asked regarding the Group's commitment to Scottish Life policyholders and whether they are just 'looking after their own'. The group have also sold around £3bn of their equity holdings in a move to try and stabilise any stock market volatility. Additionally, the Group have confirmed they will ask the industry regulator, the Financial Services Authority, for a solvency waiver to give them more trading flexibility.
Our view:
If you have Scottish Life or Royal London with profits policies, take independent advice. If your policy is set to pay out a lump sum for mortgage repayment or the like, do not ignore the cuts in payouts. You should review your situation and take advice.
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