UK - Scottish Life is slashing terminal bonus rates on its with-profits funds due to the poor performance of equities over the past five years.
The firm, which is part of Royal London, said terminal bonuses for individuals with a 10-year policy would be cut from 7% to 1% while rates for a 15-year policy would fall from 10% to 6%.
Rates for 20-year term policies are to fall from 22.5% to 8.5%. Scottish Life chief executive Brian Duffin said: “In common with the rest of the industry our payouts reflect lower rates of returns compared to those enjoyed in the past.
“It is essential to manage terminal bonus rates in this way to ensure we are treating all our policyholders fairly – both those with policies maturing now, and those with policies which mature in the future. It is important to note real rates of return show most of our policyholders get satisfactory returns from their savings.”
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