Standard Life halt with-profits bonuses
Bonus rates from with-profits funds have been frozen over the past year for those who are policy holders with Standard Life. This impacts on over one million of those who have taken out a policy with the insurer. Margaret Flaherty from the company said that ‘while returns from equity markets have improved they are still some way off recovering from the preceding downturn.” Earlier this year, Aviva announced it was “holding or reducing” regular bonus rates for its savers.
This news contrasts sharply with the fact that the FTSE 100 share index rose by over 22% last year, but the with profits fund of Standard Life did not see comparable growth due to “low exposure to shares”. However, some pension insiders have noted that this would still outperform the return you would get from an orthodox building society savings account.
Laith Khalaf who works for annuity experts Hargreaves Lansdown agreed with the notion that with-profits funds may not currently be a wise choice saying that “we have a pretty dim view of with-profits, and unsurprisingly this bonus announcement hasn’t changed that. Every year payouts seem to fall further, even though 2009 was a pretty good year by any anyone’s standards”.
