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With-Profits Bonus Declaration

Over 2016, The Prudential Assurance Company Limited With-Profits Fund returned 12.2% (net of tax) and 14.5% (gross of tax), both before charges and the effects of smoothing.

Past performance is not a reliable indicator of future performance.

Summary of 2017 annual bonus rates

Most* Unitised (or accumulating With-Profits) With-Profits bonds 1.50%
Flexible Retirement Plan (including income drawdown) and Trustee Investment Plan (for all new business post 7/11/11) 1.05%
Corporate pensions (unitised) 1.75%
With-Profits Pension Annuity 0.25%
Most^ Unitised (or accumulating With-Profits) Personal Pensions 1.50%

*Most refers to Prudence Bond (Optimum Return) both no initial charge and initial charge versions, International Prudence Bond & Prudential International Investment Bond (Euro), International Prudence Bond & Prudential International Investment Bond (US) and PSA/PIB (Fund over £6000).

^Most refers to all Capsil and OPAL personal pensions. It also applies to Prudential Series A and Premier Plans (including TIP Series A for business sold between 01/01/2003 and 06/11/2011) written on or after 01/01/2003.

In 2016, our With-Profits Fund delivered strong returns in the face of continuing market uncertainties. As a result we’re pleased to announce that the vast majority of our customers will receive bonuses that deliver increases to the total values of their policies.

Despite expectations that interest rates will continue at current low levels, we’re pleased that the vast majority of our customers will receive an annual bonus this year. This means they will see increases in the guarantees provided by their policies.

In 2017, we’ll maintain our prudent approach to setting annual bonuses, which is a key pillar of the success of our With-Profits Fund. We’ll also continue to smooth some of the extreme highs and lows of short-term investment performance.

Read more about With-Profits Bonus Declaration February 2017


Fund size and rating

The Prudential Assurance Company Limited With-Profits Fund is the largest and one of the financially strongest with-profits funds in the UK. The size and strength of our Fund allows us to invest in a very wide range of assets and individual companies.

The total level of assets backing the with-profits business in the Fund was £91.0bn at 31 December 2016.

The Prudential Assurance Company Limited is rated AA for financial strength by Standard & Poor's, as at January 2017. This is one of the highest ratings currently given to any UK Life Assurance Company.


Fund Management

Prudential Portfolio Management Group are our in-house asset-allocation experts in the UK. They select a wide range of assets to hold in the With-Profits Fund, in line with the Fund's objective. The aim is to maximise long-term investment returns while maintaining the financial security of the Fund.


PAC With-Profits Fund - comparative cumulative and annualised returns over 1, 5 and 10 years
  1 Year return % 5 Years cumulative return % 10 Years cumulative return % 5 Years annualised return % 10 Years annualised return %
Prudential With-Profits Fund (net)* 12.2 46.7 72.4 8.0 5.6
Prudential With-Profits Fund (gross)** 14.5 56.6 84.2 9.4 6.3
ABI UK - Mixed Investment 20% - 60% Shares Sector Average - Life Funds*** 9.0 34.9 48.9 6.1 4.0
ABI UK - Mixed Investment 20% - 60% Shares Sector Average - Pension Funds*** 10.4 41.4 60.2 7.1 4.8
FTSE 100 Total Return 19.1 54.5 66.9 9.1 5.3
Morningstar 90 Days Notice (UK Savings £25,000+) Net 0.4 2.1 9.5 0.4 0.9
Morningstar 90 Days Notice (UK Savings £25,000+) Gross 0.5 2.7 12.0 0.5 1.1
UK Retail Price Index 2.1 11.1 31.2 2.1 2.8

Source: Prudential, FE. All figures to 31 December 2016
* With-Profits performance is net of tax and before charges and the effects of smoothing.
** With-Profits performance is gross of tax and before charges and the effects of smoothing.
*** ABI UK – Mixed Investment 20-60% Shares – The Association of British Insurers (ABI) has a classification system whereby the performance of funds that have similar asset allocations are grouped together to give an average performance figure. This is known as the sector average. It is important to note that some if not all of the Funds comprising this sector average will already have fund management charges deducted from their performance.

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