With-Profits Bonus Declaration February 2017

Dear Customer,

Strong returns despite continuing market uncertainties.

I’m pleased to announce that in 2016, our With-Profits Fund delivered strong returns in the face of continuing market uncertainties.

Looking after your money

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.

You can see in the table below what our With-Profits Fund has returned over the last 1, 5 and 10 years to 31 December 2016.


1 year Fund return

5 year Cumulative Fund return

10 year Cumulative Fund return

5 year Annualised Fund return

10 year Annualised Fund return

Prudential With-Profits Fund
(after tax) 






Prudential With-Profits Fund
(before tax) 







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

This year, for most of our customers, we are increasing final bonus rates compared to the rates declared at the February 2016 declaration. These rates will be added to policies at the point of claim and most of our customers will see an overall increase in policy value. This is a reflection of the strong return that our Fund earned over 2016.

Final bonus aims to give customers a fair share of the investment returns earned over the lifetime of their policies, after taking into account, for example, charges, the effects of smoothing and any applicable tax. Any final bonus declared in February 2017 may be payable when you cash in or switch out of the With-Profits Fund in the forthcoming bonus year, but is not guaranteed.

When setting annual bonus rates a number of factors are considered, including the economic outlook and the long-term returns we expect our investments to earn in the future. Taking these factors into account, we are declaring an annual bonus which will continue to add to the guaranteed benefits of customers’ policies. However we, in common with many economic commentators, forecast that interest rates are likely to continue at their current low levels for longer, and as such we feel it’s prudent to lower the annual bonus rates for some of our customers compared to last year.

The reduction in annual bonus rates helps us to manage levels of guarantees, allowing the With-Profits Fund to retain the investment flexibility it needs to better withstand any future fluctuations in the market volatility and continue to deliver competitive overall investment returns. This, in turn, gives the Fund a better opportunity of paying higher final bonuses in future.

Please remember that 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. Please see information specific to your Plan for further details.

The value of a plan can go down as well as up and the value in future may be less than the amount invested. For investments in our With-Profits Fund, the value of your Plan depends on how much profit the Fund makes and how we decide to distribute it. Past performance isn’t an indicator of future performance. Please refer to your Fund Guide for more information about each fund’s objectives and the different risks for each fund.

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. 

Thanks for investing with Pru

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.

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.

Thank you for continuing to invest with us.

Yours faithfully, 

Clare Bousfield

CEO Insurance, Prudential UK & Europe


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