2022 Bonus Rates for former Equitable Life With Profits Annuity Customers

In 2021, our globally diversified With-Profits Fund performed well in mostly positive financial markets despite the backdrop of Covid-19 uncertainty. This means nearly all our former Equitable Life With-Profits Annuity planholders will receive bonuses that deliver year-on-year increases in income, after allowing for the Anticipated Bonus Rate (ABR) and any Guaranteed Interest Rate (GIR).

In 2022, the team will continue to take decisions that allow them to manage the Fund prudently. We’ll aim to secure the highest total return for the Fund (after any tax and investment expenses) while maintaining an acceptable level of risk and protecting our planholders.

Your level of income at the start of your Plan depended on your Anticipated Bonus Rate (ABR) and whether your Plan had a Guaranteed Interest Rate (GIR). The higher your combined ABR and GIR, the higher your income in the early years. This combination also meant a higher chance of falls in income in the future. Your future level of income depends on the combination of:

  • The level of Regular Bonus, Overall Rate of Return (ORR) and Interim Rate of Return (IRR) we declare relative to your ABR
  • Any GIR

The combination of the Regular Bonus, ORR and IRR we declare represents your fair share of the profit, after charges and smoothing, earned on the With-Profits Fund since the transfer of your Plan to Prudential on 31 December 2007.

So what are the 2022 Bonus Rates?

The 2022 bonus rates to be applied to your annuity on the plan anniversary following 1 April 2022 are:

  • Overall Rate of Return: 13.0%
  • Interim Rate of Return: 3.5%
  • Regular Bonus: 0.0%

The IRR can change or be removed at any time.

The same ORR applies to all plans and can be negative.

How does this affect my income?

Former Equitable Life With-Profits Annuity customers, who are receiving their Total Annuity, will see average year-on-year changes in income of 13.0% before allowing for their Anticipated Bonus Rate (ABR) and any Guaranteed Interest Rate (GIR), as a result of the bonuses declared in the February 2022 Bonus Declaration. This means that for an annuity customer with a combined ABR and GIR of 6.5%, their income may increase by up to 6.5% at their next Plan anniversary on or after 1 April 2022.

Where customers are in receipt of their Guaranteed Annuity almost all will see their income increase at their next Plan anniversary on or after 1 April 2022 as a result of the bonuses declared.

Only plans issued before 1 July 1996 are subject to a Guaranteed Interest Rate. This is 3.50% for all of these plans.

If you've got any questions about this years Bonus Declaration, please read our frequently asked questions.

2018 was a difficult year for financial markets, which experienced lots of ups and downs. These impacted our With-Profits Fund because it invests globally in many different investments. This is reflected in our 2019 bonus declaration.

 

We’ll continue to manage the Fund prudently. We’ll aim to secure the highest total return for the Fund (after any tax and investment expenses) while maintaining an acceptable level of risk and protecting our planholders. We’ll also continue to smooth some of the extreme highs and lows of investment performance

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