With-Profits Bonus Declaration February 2016

We are pleased to announce bonuses which reflect the solid investment performance of the Fund.

Dear Policyholder,

Positive returns despite market conditions

I'm pleased that, in spite of volatile market conditions, our With-Profits Fund has performed well and delivered a positive investment return during 2015.

Looking after your money

At the February 2016 declaration, we are announcing bonuses which reflect the solid investment performance of the Fund, and which continue to provide fair pay-outs based on what the Fund has achieved.

Over 2015, the Prudential Assurance Company Limited With-Profits Fund returned 3.2% (net of tax) and 3.6% (gross of tax). Over the last five years our Fund has delivered a total return of 33.5% (net of tax) and 39.6% (gross of tax), giving an annualised return of 6% (net of tax) and 6.9% (gross of tax). Over the last 10 years, the total return was 70.4% (net of tax) and 80.8% (gross of tax), giving an annualised return of 5.5% (net of tax) and 6.1% (gross of tax) - all up to 31 December 2015. 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

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.

After taking these factors into account, we've decided to lower slightly the annual bonus rates for some of our customers at the 2016 declaration. This small reduction in annual bonus rates helps us to manage the levels of guarantees, allowing the With-Profits Fund to retain investment flexibility and to better withstand any future market volatility. This, in turn, gives the Fund a better opportunity of paying higher final bonuses in future.

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.

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 a plan depends on how we decide to distribute it. Please refer to the Fund Guide or Guide to Fund Options 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 2016, 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 protection for policyholders. In addition we’ll 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,

John Warburton
Executive Director, Distribution

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