Boost for with-profits investors
Policyholders at Standard Life benefited from surplus assets held in the group’s with-profits fund for the first time.
The insurer said people with policies maturing from Tuesday, or those who cashed in their investment or had a with-profits pension annuity, would receive a proportion of the groups so-called inherited estate.
The payouts apply to people who have held a with-profits policy since before the society demutualised on July 10 last year and who still hold their investment. The group would not disclose how it was dividing the money between policyholders.
But it said someone with a 25-year endowment policy into which they had paid £50 a month could expect to receive around £183 if their policy was maturing today, while someone with a pension into which they had paid £200 a month for 20 years would get £315.
The term inherited estate refers to surplus assets accumulated above those needed to meet the liabilities in the with-profits fund. When Standard Life demutualised its inherited estate was worth around £800 million, and by the end of last year this had risen to £1.3 billion.
The group also said that most policy payouts and values had risen since last year, although it declined to put a percentage on the increase. It also refused to reveal what level of bonuses it was paying, saying it was not company policy to disclose these.
Instead the group said someone who had paid £50 a month into an endowment policy for 20 years would receive a final payout of £23,041 if it matured today, compared with £21,917 if a 20-year policy had matured last year.
A pension into which £200 a month had been paid for 20 years would now be worth £91,097, well down on the £96,343 a 20-year policy would have been worth if it had matured in 2006.
The group also said it had increased its exposure to equities, which it believed would improve the long-term prospects for future with-profits returns.
With-profits are long-term savings policies that aim to smooth out investment volatility by holding back returns in good years to pay out in bad ones. They are often taken out as a pension or an endowment to pay off a mortgage.