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One million customers hit by Aviva with-profits bonus cuts
by William Robins on Feb 10, 2012 at 12:18
Over one million Aviva customers will see their regular with-profits rates cut for 2012 which the insurer blamed on market turmoil.
With-profits customers in unitised life and pension with-profits policies saw a 0.25% reduction and some with-profits annuity customers seeing their regular bonus cut by 1.5%.
The life company also reduced the regular bonus rates by 0.5% for conventional endowment policies in ex-CGNU and ex-CU funds.
Regular bonus rates for 2012 are 2.5% for bonds, 3% for pensions, and 2.75% for stakeholder pensions. These are all drops from the 2011 rates of 2.75% for bonds, 3.25 for pensions and 2.75% for stakeholder pensions.
Aviva has a total 1.8 million customers in with-profits policies with 500,000 in endowment policies and the remainder split between bonds, pensions and stakeholder policies.
A spokesman for Aviva said: 'We are trying to avoid building a high regular rate which would mean applying a high market value reduction on the pot at the end of its life. We want our customers to have a bigger pot at the end.'
Final bonus rates increased by an average of 4% in July 2011, but have been reduced by an average of 6% due to falls in investment markets since the increase in July.
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