Press releases

Legal & General announces continued growth for with profits customers

Jackie Noakes

Legal & General today announced another year of growth on the assets held for their with profits policyholders with a return of 3.1% (before tax) for the 12 months to 31 December 2015.

The company added bonuses worth £366 million to its with profits policies last year. This is lower than the £387 million added in 2014, reflecting a gradual reduction in the number of customers as policies continue to mature.

Long-term returns continue to be well above inflation…

Over 25 years the assets held on behalf of Legal & General’s with profits policyholders have returned 8.5% per annum before tax and over 10 years the annual return is 5.5% before tax. This has exceeded the return on an average balanced managed fund and continues to be more than the average inflation rate over the same period, based on the Retail Prices Index (RPI).

Single Premium Investment Return per annum over 10 years Return per annum over 25 years
Legal & General With Profits 5.5% (before tax) 8.5% (before tax)
Average balance managed fund*  4.9% (before tax) 7.4% (before tax)
Retail Prices Index Inflation (RPI) 3.0% 2.8%

* Source: ABI UK Balanced (mixed investment 40-85% equity) fund

Jackie NoakesCommenting on our 2015 with profits performance Jackie Noakes (photo, left), Managing Director Savings, Legal & General Assurance Society said: “One of the main advantages of a with profits investment is the ability to protect our customers against short-term market volatility by ‘smoothing’ payouts. 2015 was a challenging year for investment markets but we have actively allocated the fund across a broad spread of assets achieving another year of positive returns. This means that our with profits customers continue to see steady growth on their investments over the long-term, well in excess of inflation.”

Following the closure to new business of the With Profits Fund on 31 January 2015, the fund continues to maintain a broad mix of assets, very similar to the asset allocation of the previous year.

 

Asset allocation:

Asset allocation for With Profits Growth Bonds, With Profits Endowments and With Profits Pensions

As at 31/12/2015 With Profits Growth Bonds and Endowments Unitised With Profits Pensions

(up to 31/12/1994)
All other With Profits Pensions*

 

UK shares 19% 14% 16%
Overseas shares 28% 21% 23%
Fixed interest securities 38% 53% 48%
Commercial property 15% 12% 13%

*Excludes With Profits Annuities and AF4

 


For more information please contact:

Richard King

Richard King
Head of Group Corporate Communications

t: +44 (0) 2031 242095
m: +44 (0) 7515 324001
e: richard.king@group.landg.com

 

FOR EXAMPLES OF INVESTMENT VALUES PLEASE SEE BELOW.

Bond investors:

10 Year Return for £10,000 invested in a Legal & General With Profits Growth Bond
Date of investment Cash-in value as at 19/2/2015 Cash-in value as at 18/2/2016 Return over year Return per annum
Invested on 18 Feb 2006 £13,324 £13,704 2.9% 3.2%

 


Endowment mortgages:

25 year mortgage endowment maturing on 1 March 2016: (male aged 29 at entry)
Payment Total paid Cash-in value as at 1/3/2015 Maturity value as at 1/3/2016 Return over year Return per annum
£50 per month level premium £15,000 £24,418 £25,170 0.6% 3.9%

 

Pension savers:

Value of With Profits Pensions for a male retiring at age 65, paying monthly contributions of £200
Plan Term Transfer value as at 1/3/2015 Total payments since 1/3/2015 Retirement value as at 1/3/2016 Return over year Return per annum
10 year £27,142 £2,400 £30,674 4.0% 4.
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