Scottish Life has altered the final bonus rates for its regular and single premium conventional with profits pension policies in its closed £4.5 billion Scottish Life fund.
Final bonus rates for regular premium, conventional with profits pension plans in the fund are 16% from January 2006, compared with 14% last year, for a 10-year term. For a 15 and 20-year terms, the final bonus rates are 20% and 25% respectively.
Final bonus rates for single premium, conventional with profits pension plans also changed. For a 10-year term, the final bonus rate is 3% less than in 2005 at 27%. For a 15-year term, the final bonus is now 17%, compared with 6% for a policy maturing in 2005. The rate has changed from 27% last year, to 41% in 2006 for a 20-year term policy.
Our view
We have seen a strong market recovery over the last three years and it is right that providers should be increasing rates again, assuming ofcourse losses from five years ago have been recovered.
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