Prudential slashes with-profits rates
Thursday, 13 Nov 2008 11:42
Prudential has reduced the final bonus rates on its With-Profits Fund.
The move will see policy values cut by between five per cent and ten per cent when policyholders take the final payment, which usually occurs upon retirement.
The firm said it had lowered the bonus rate in a bid to bolster the fund during the current economic downturn.
David Belsham, chief actuary at Prudential, said: "We believe today's move is prudent and will ensure the continuing long-term strength of the fund and protect the ongoing interests of our long-term customers.
"It is the right course of action to take at this time."
Prudential said it would not be altering the annual bonus rates on policies. And it stressed the fund had delivered returns of 102 per cent over 10 years, to September 30th 2008.
It also said there would be no change in the company's approach to Market Value Reduction, the alteration in the value of the fund which is made if policyholders withdraw money.