FRIENDS LIFE GROUP LTD Important note: The information in this section is intended for use by journalists only and customers should not use it to make financial decisions. Please remember that information in past press releases may no longer be current
Friends Life today announced the bonus rates for its with-profits funds.
Mike Kipling, With Profits Actuary, said: "During 2014, fixed interest stocks, both the UK Gilt market and corporate bonds performed well. World stock markets also generally produced strong returns, although UK equity markets did less well. Against this backdrop, we are pleased to report that all of our with-profits funds have earned reasonable investment returns for our with profits customers."
Key information for Friends Life's main with-profits funds:
Friends Life FLAS With Profits Fund (ex Sun Life Assurance Society policies)
- The fund earned a return of 9.3% in 2014 before tax.
- Equities and property are targeted to be 50% of the fund's investments.
- Regular bonus rates applying to unitised and conventional policies have been increased or maintained.
- No Market Value Reductions (MVRs) apply on any policies.
- Final bonus rates for unitised pensions and bonds have generally been increased. Conventional final bonus rates and some unitised life final bonus rates have been reduced.
Friends Life FLC With Profits Funds (ex AXA Sun Life policies)
- The funds earned a return of 9.3% in 2014 before tax.
- Equities and property are targeted to be 60% of the funds' investments.
- Regular bonus rates applying to unitised and conventional policies have been increased or maintained, with the exception of some series of bonds.
- No MVRs apply on any policies.
- Final bonus rates for unitised business have generally been increased, whereas conventional business has seen some decreases.Final bonus rates for unitised pensions and bonds have generally been increased. Conventional final bonus rates and some unitised life final bonus rates have been reduced.
Friends Life FP With Profits Fund (ex Friends Provident policies)
- The fund earned a return in 2014 of:
- 7.2% in respect of policies written before 9 July 2001 (pre demutualisation) before tax.
- 7.0% in respect of policies written after 8 July 2001 (post demutualisation) before tax.
- Equities and property are targeted to be:
- 45% of the fund's investments for pre demutualisation policies.
- 55% of the fund's investments for post demutualisation policies.
- Regular bonus rates have been increased or maintained.
- No MVRs apply on any policies.
- Final bonus rates for conventional policies have generally been increased.
- Some final bonus rates for unitised policies have increased and some decreased.
Impact of the declaration
Some examples of the increase in the value of policies as a result of these investment returns, bonus rate changes and other factors are shown below.
25-year with-profits endowment policies
The table below shows a with-profits mortgage endowment policy taken out in March 1990 by a male aged 30 years next birthday, compared to the surrender value it would have had 12 months earlier. Premiums are assumed to have been paid monthly with £50 of each premium paying for the with-profits endowments benefit.
Surrender Value in March 2014 £ | Maturity Value in March 2015 £ | Increase over last 12 Months (Excluding premiums) % | |
| Friends Life FLC (Unitised) |
32,338
|
36,035
|
9.5
|
| Friends Life FP (Conventional) |
26,393
|
29,682
|
10.1
|
20-year with-profits pension plans
Unitised with-profits personal pension plan taken out in March 1995 by a male retiring at age 65, paying £200 per month gross, compared to the transfer value it would have had 12 months earlier. The value of the fund is returned on death before retirement.
Transfer Value in March 2014 £ | Maturity Value in March 2015 £ | Increase over last 12 Months (Excluding premiums) % | |
| Friends Life FLAS |
86,185
|
96,444
|
9.0
|
| Friends Life FLC |
86,822
|
102,652
|
15.3
|
| Friends Life FP |
75,212
|
81,711
|
5.4
|
With-profits bonds
Unitised with-profits bond taken out in March 2000 with a single premium of £10,000.
14 year Surrender Value in March 2014 £ | 15 year Surrender Value in March 2015 £ | Increase over last 12 Months % | |
| Friends Life FLC |
16,996
|
18,932
|
11.4
|
| Friends Life FP |
16,392
|
17,368
|
6.0
|
Notes
With-profits governance:
The With Profits Committee of Friends Life has considered these bonus rates and has assessed them against the Principles and Practices of Financial Management published by Friends Life. The Committee is satisfied that the rates represent reasonable and appropriate application of the company's discretion.
How with-profits policies work:
- A with-profits policy differs from a unit linked policy in that it adds an element of security which you do not get from an investment totally reliant on the current value of its underlying assets. This cushion against uncertainty takes the form of the guaranteed benefits and additional regular bonuses, which are guaranteed in certain circumstances even if the market subsequently falls.
- Some with-profits policies give further protection by providing an element of life assurance cover.
- We have a range of bonus series to cater for different product structures and premium rates. These are designed to achieve fairness between policyholders.
- Please note that as bonus rates are regularly reviewed they may change at any time
- Future bonuses cannot be guaranteed as they come from profits that have not yet been earned.
For more information, please contact:
| Ben Moss | PR Consultant |
T: 0117 928 5843 | ben.moss@friendslife.co.uk |
Ref: N0224
Notes to EditorsFriends Life provides pensions, investments and insurance for over five million customers. Our key business lines are corporate benefits, protection and retirement income.
Friends Life is the brand name of Friends Life Group Limited.
Our heritage dates back to 1810, with Friends Provident being founded in 1832 to help alleviate the hardship of Quaker families facing misfortune.
Other brands in the Friends Life group include:
- Friends Provident International, which provides life assurance, pensions and investment products to Asia, Middle East, Europe, UK and other selected markets.
- fpb AG, a wholly owned distribution partner in Germany.
- Sesame Bankhall Group, which was formed in 2009, combining an IFA network, support service provider and mortgage club, to create a large distributor of professional support services to financial advisers.
Important
This news service is for information purposes only and does not provide any form of advice, recommendation or financial promotion. Any opinions expressed by third parties are those of the third party concerned and not of Friends Life Group Limited. Friends Life Group Limited does not accept liability for any errors or omissions or for loss incurred because of reliance on information or opinions given.
The content of the news items set out above are accurate only as of the date of issue and Friends Life Group Limited does not undertake any obligation to update them.
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Friends Life is a business name of certain companies in the Friends Life group including the following
Friends Life and Pensions Limited Company number 475201
Friends Life Limited Company number 4096141
Friends Life FPLMA Limited Company number 00004599
Each of the above companies is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority
Friends Life Marketing Limited Company number 5059179
Friends Life Investment Solutions Limited Company number 6389025
Friends Life Services Limited Company number 3424940
Each of the above companies is authorised and regulated by the Financial Conduct Authority.
Friends Life Management Services Limited Company number 983330 is an appointed representative of Friends Life Services Limited, Friends Life and Pensions Limited and Friends Life Limited.
Friends Life The Blue Line Limited Company number 3146254 is an appointed representative of Friends Life Marketing Limited
Suntrust Limited Company number 1460956 is not authorised or regulated by either the Prudential Regulation Authority or the Financial Conduct Authority.
Each company is an incorporated company limited by shares and registered in England and Wales with a registered office at Pixham End, Dorking, Surrey RH4 1QA
Telephone calls may be recorded. Friends Life is a registered trade mark of the Friends Life group www.friendslifegroup.com
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