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Aviva with-profits bonus rates stay flat as MVRs cut 2%

by Daniel Grote on Feb 08, 2013 at 13:59

Aviva with-profits bonus rates stay flat as MVRs cut 2%

Aviva has kept annual bonuses flat for the majority of the 1.5 million savers in its with-profits funds, while market value reductions have been reduced by an average of 2% where they apply.

In its announcement on annual bonuses for 2013, it said they would be kept in line with 2012 levels.

However for the 27,000 savers in ex-Commercial Union bonds, annual bonuses have been reduced from 2.5% to 2%, while for the 24,000 savers in ex-Norwich Union bonds without a guaranteed bonus have reduced from 1% to 0.75%.

It has increased final bonus rates by an average of 2.5% for must unitised with-profits policies and by an average of 3% for most conventional policies. Aviva said some conventional final bonus rates had fallen by an average of 1.7%.

Annual bonus rates for new business has remained at 2.5% for bonds, 3% for pensions and 2.75% for stakeholder pensions. 

Aviva said a saver with a £10,000 with-profits bond purchased 10 years ago would now have a holding worth £17,082, equating to an annual return of 5.5%.

Aviva propositions and pricing director Tim Orton said: 'Our with-profits funds continue to perform well for our customers. With bank and building society accounts yielding low returns and stock market volatility an ongoing concern, the great strength of with-profits is its ability to invest in assets that provide income and growth.'

The main Aviva with-profits fund delivered an estimated return of 7.2% before tax in 2012.

5 comments so far. Why not have your say?

John Burchett

Feb 08, 2013 at 14:51

Poor show.

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Feb 08, 2013 at 15:50

Good show. The return on my Bond over the last 10 years is 5.5% p.a. after tax AND after charges. Not sure I could have done better than this anywhere else with a relatively cautious investment. Well done Aviva.

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Paul Barnard

Feb 08, 2013 at 18:58

Duncan Orr

Feb 09, 2013 at 12:06


Perhaps you might want to contrast the performance of their With Profits Fund against a composite benchmark of the underlying assets within the fund to appreciate why, as is usually the case, you would have been better off not using such an outdated investment strategy.

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Mark Cooper

Feb 10, 2013 at 20:49

The With-Profit Annuity bonus rate has been cut from 1.5% to 1.0%.

How this can possibly represent a "smoothed-return" or in anyway reflect their use of our clients' money is beyond comprehension.


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