Prudential continues to deliver consistently strong with-profits returns for policyholders

24 February 2015

  • Strong annualised post-tax returns for policyholders over the medium to long-term:
    • Prudential With-Profits Prudence Bond (20 year, £10,000 single premium)                      6.0 per cent *
    • Prudential With-Profits Prudence Bond (15 year, £10,000 single premium)                      4.5 per cent *
    • Prudential With-Profits Prudence Bond (10 year, £10,000 single premium)                      4.8 per cent *
    • Prudential With-Profits Individual Pension (20 year term, £200 pm RP)                             5.5 per cent *
    • Prudential With-Profits Savings Endowment (25 year term, £50 pm RP)                            5.9 per cent *
    • Scottish Amicable With-Profits Savings Endowment (25 year term, £50 pm RP)               5.5 per cent *
      (* Net of tax where relevant and charges. Endowment examples based on male aged 29 at start of contract.)
  • Prudential’s consistent, long-term approach to the management of its With-Profits Fund continued to benefit policyholders during 2014.
  • Policyholders will typically see year-on-year increases of between 5 per cent and 8 per cent in their accumulating with-profits policy values over the past year.
  • Total bonus rates maintained or increased on all unitised plans.
  • A typical 25 year £50 per month Prudential mortgage endowment maturing in 2015 will have increased in value by up to 10.1 per cent in its final year.
  • An estimated £1.9 billion was added to Prudential with-profits policy values in 2014 (split £0.6 billion Annual Bonus and £1.3 billion Final Bonus).
  • An estimated £22 billion has been added to Prudential with-profits policy values over the last 10 years.
  • Prudential’s With-Profits Fund has delivered a cumulative investment return of 109.5 per cent over 10 years, compared with the FTSE 100 (total return) index return of 96.1 per cent over the same period.
  • With-profits with Prudential continues to be an attractive medium to long-term investment when compared with many other alternative investment options.

Aki Hussain, Chief Financial Officer at Prudential UK & Europe, said: “Once again our customers have benefited from our consistent long-term approach to With-Profits. The financial strength of our With-Profits Fund, and the way we have managed it, sets Prudential apart.

“Year-after-year we continue to provide strong annualised returns for our customers and today’s announcement reflects our prudent and fair approach to setting bonus rates. Despite continuing economic uncertainty and interest rates being at an all time low we have maintained our annual bonus rates for this declaration, further proof that investing in a strong with- profits fund can produce good returns for the cautious investor.

“The Prudential With-Profits Fund is one of the largest and financially strongest in the UK and the significant increase in sales of our with-profit bonds in 2014 reflects the rising demand from customers looking to protect themselves against the full impact of uncertain market conditions. With Prudential they have the confidence of knowing that their savings are invested in a financially strong, actively-managed With-Profits Fund.”

“The Prudential With-Profits Fund is one of the largest and financially strongest in the UK and the significant increase in sales of our with-profit bonds in 2014 reflects the rising demand from customers looking to protect themselves against the full impact of uncertain market conditions. With Prudential they have the confidence of knowing that their savings are invested in a financially strong, actively-managed With-Profits Fund.”

Ned Cazalet, leading industry commentator, observes that: “Careful liability management coupled with an impressive track record for astute asset allocation has enabled Prudential to maintain solid financial strength at the same time as consistently delivering top flight investment returns to enhance the market-leading payouts enjoyed by its UK with- profit policyholders.”

Prudential’s total bonus payments in this declaration are estimated to be £1.9 billion and policyholders will typically see year-on-year increases of between 5 per cent and 8 per cent in their accumulating with-profits policy values.

Media contacts

Louise Bryans

020 7004 8280

Louise.Bryans@prudential.co.uk

Darragh Leeson

020 7004 8081
darraghuk.leeson@prudential.co.uk

The information contained in Prudential UK's press releases is intended solely for journalists and should not be used by consumers to make financial decisions. Full consumer product information can be found at www.pru.co.uk