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With-Profits Bonus Declaration

Over 2019, The Prudential Assurance Company Limited With-Profits Fund returned 9.6% (net of tax) and 11.5% (gross of tax), both before charges and the effects of smoothing*. Please see information specific to your Plan to find out more.

*This describes the main asset pool in our With-Profits Sub-Fund, which is relevant to the vast majority of our customers.

Fund returns do not include the additional surplus being shared as part of the PACL Final 2020 bonus declaration.

Please remember that past performance is not a reliable indicator of future performance.

On the Bonus Declaration literature page, you'll find literature and sales aids that you can use to discuss bonus declaration with your clients.

Summary of 2020 annual bonus rates

  Annual bonus rate
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). With effect from 01/03/2020, the high tier bonus threshold is reduced from £6,000 to £2 implying all PSA/PIB business receive high tier bonuses from that date going forward.

^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.

Our globally diversified With-Profits Fund performed well in 2019 and that means:

  • For all of our planholders, we’re keeping Annual bonus rates at the same level as last year, which will continue to add to the guaranteed benefits of our customers’ plans.
  • Most of our customers will benefit from increases in their final bonus and therefore the value of their plans. Final bonus may vary and isn’t guaranteed.

This year, we’ve also got additional money in the With-Profits Sub Fund to share with some of our With-Profit plan holders. Because of this, we’ve increased the unsmoothed value of their plans by 1.25%. This is reflected in our final bonuses from this year. There’s a chance we might have to take back this extra money.

You can find out more details on our website at www.pru.co.uk/additionalsurplus

We aim to provide fair payouts based on what the Fund has achieved and we’ll continue to smooth some of the extreme highs and lows of investment performance.

In 2020, we’ll continue to manage the Fund prudently. We’ll aim to secure the highest total return for the Fund (after any tax and investment expenses) while maintaining an acceptable level of risk and protecting our planholders.

Read more about With-Profits Bonus Declaration February 2020

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 £117.6bn at 31 December 2019.

The Prudential Assurance Company Limited is rated A+ for financial strength by Standard & Poor's, as at December 2019. This is one of the highest ratings currently given to any UK Life Assurance Company.

Fund Management

M&G Treasury and Investment Office (T&IO) 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 of the Fund is to maximise 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)* 9.6% 35.4% 94.3% 6.3% 6.9%
Prudential With-Profits Fund (gross)** 11.5% 42.0% 115.5% 7.3% 8.0%
ABI UK - Mixed Investment 20% - 60% Shares Sector Average - Life Funds*** 10.2% 21.0% 58.8% 3.9% 4.7%
ABI UK - Mixed Investment 20% - 60% Shares Sector Average - Pension Funds*** 10.9% 24.8% 71.5% 4.5% 5.5%
FTSE 100 Total Return 17.3% 40.8% 104.0% 7.1% 7.4%
Morningstar 90 Days Notice (UK Savings £25,000+) Net 0.4% 2.0% 4.2% 0.4% 0.4%
Morningstar 90 Days Notice (UK Savings £25,000+) Gross 0.6% 2.5% 5.3% 0.5% 0.5%
UK Retail Price Index 2.2% 13.4% 33.9% 2.5% 3.0%

Source: Prudential, FE. All figures to 31 December 2019

Note: the With-Profits Fund returns shown don't reflect the distribution of excess surplus.

* With-Profits performance is net of tax and before charges and the effects of smoothing. The returns shown are for the main asset pool in our With-Profits Sub-Fund, which is relevant to the vast majority of our customers.
** With-Profits performance is gross of tax and before charges and the effects of smoothing. The returns shown are for the main asset pool in our With-Profits Sub-Fund, which is relevant to the vast majority of our customers.
*** 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's 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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