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6267.07 -43 0.68% 04:35

Standard cuts with-profits bonus rate for 600,000 customers

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Standard cuts with-profits bonus rate for 600,000 customers

Standard Life has cut the with-profits bonus growth rate for around 600,000 customers for the second year in a row.

Investors in Standard Life’s unitised life plans will see their bonus growth rate cut from 0.75% to 0.5% from 1 February. The 0.75% rate was itself a reduction from 2011’s rate of 1.25%.

Customers in Standard Life’s other unitised pensions plans will also see a drop in their bonus growth rate next year from the 1% they will receive on 2012's payouts, down to 0.5% from February 2013.

This rate was also reduced last year from 1.5% to 1%.

A spokeswoman said the rate cuts would allow greater investment flexibility, with an increased focus on equities.

For the majority of Standard Life’s 1.4 million with-profits customers, those holding with-profits bonds, there was no change to the bonus growth rate which remains at 2.5%.

Standard Life’s Heritage with-profits fund delivered a return of 7.9% over 2012.

Margaret Flaherty, Standard Life’s with-profits communications manager, said: ‘We’re pleased to say that customers have seen a year-on-year increase in the value of their plan. In the last year a typical pension customer has seen a return of 7% on their plan while a typical endowment customer has seen a return of 5%.’

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