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With-Profits Bonus Declaration
February 2015

Dear Policyholder,

Another good year

I'm very pleased to report that the Prudential With-Profits Fund performed well in 2014 and has once again delivered positive investment returns.

Delivering for you

Market conditions were fairly steady through most of 2014 until falls in the returns available on long-term assets later in the year. However, stock markets always have a level of uncertainty about the economic outlook and future market performance and we have taken this into account in this year's bonus declaration.

Over 2014, the Prudential Assurance Company Limited With-Profits Fund returned 7.0% (net of tax) and 8.3% (gross of tax). Over the last five years our Fund has delivered a total return of 43.5% (net of tax) and 51.8% (gross of tax) and over the last 10 years, 93.0% (net of tax) and 109.5% (gross of tax) - both up to 31 December 2014. All of these figures quoted are before charges and the effects of smoothing. Please note that past performance is not a reliable indicator of future performance.

What this means for you

We are pleased to say that annual bonus rates this year are being maintained for all UK with-profits customers.

We aim to provide fair pay-outs based on what the Fund has achieved. In the six years since the 2008 banking crisis, our With-Profits Fund has delivered strong returns for the benefit of our with-profits customers, allowing us to pay competitive bonuses.

Generally, the better our Fund performs over the medium to long-term, the more scope we'll have to pay bonuses. We aim to pay you a fair share of the investment return on our With-Profits Fund over the lifetime of your investment. The total bonuses added to your Plan won't reflect the performance of the underlying fund exactly because of, for example, charges, the effects of smoothing and any applicable tax. The rate of bonus added will also vary depending on the type of Plan you have. You'll find details of how your Plan has performed in your yearly statement.

Depending on the type of Plan, in some circumstances we may apply a Market Value Reduction if you take money from your Plan, which will have the effect of reducing your fund value. We do this to ensure you receive the fair value of your Plan.

You're right to be with the Pru

Ours is one of the largest and 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. I believe the size, strength and diversity of our Fund makes us stand out from the crowd.

In 2015, we'll continue with our prudent approach, which is a key pillar of the success of our With-Profits Fund. We aim to secure the highest total return for the Fund over the long-term, while maintaining an acceptable level of risk and protecting our policyholders. In addition, through the bonus process, we'll continue to smooth some of the extreme ups and downs of short-term investment performance.

Thank you for continuing to invest with us.

Yours faithfully,
John Warburton
John Warburton
Executive Director, Distribution

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