The website This is Money, part of the Daily Mail group, has provided a perspective in anticipation of this year’s With-profits bonus declarations. The article outlines a view from AWD Chase De Vere that With-profit funds will have achieved growth in 2012 of between three to ten percent. However, This is Money expresses uncertainty as to whether these returns will make it through to final payouts for policies maturing in 2013.
In response to the article, Alec Taylor, Head of TEP Investments at SL Investment Management said, “We have seen a very promising recovery in With-profit fund returns since the market crash in 2008. However, we have yet to witness these positive investment returns fully feeding through into corresponding increases in maturity payouts. We believe that Life Offices will naturally be cautious about payout levels in 2013 and 2014 as the volume of policies maturing in these years is substantial. This isn’t necessarily good news for policy holders with policies maturing imminently, but it does ensure that the longer term prospects for With-profits remain strong”.
Most major Life Offices will be declaring new bonus rates over the next quarter, with policy holders receiving annual statements from their life offices. For policy holders reviewing their plans and considering an exit from their With-profits endowment, they should always consider contacting Surrenda-link for a free valuation of their policy before deciding to surrender as the sale value of policies could be higher than the surrender value.