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.
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.
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
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.
M&G Treasury and Investment Office (T&IO)
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.
London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). © LSE Group 2018. FTSE Russell is a trading name of certain of the LSE Group companies. e.g., “FTSE®” “Russell®”, “FTSE Russell®”, “MTS®”, “FTSE4Good®”, “ICB®”, “Mergent®, The Yield Book®,” are a trade mark(s) of the relevant LSE Group companies and are used by any other LSE Group company under license. “TMX®” is a trade mark of TSX, Inc. and used by the LSE Group under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.