Standard Life announces review of its with-profits bonus rates

Most plans affected by this declaration will show an increase in value since the October 2008 bonus review, although as a consequence of 2008's extreme investment conditions, plan values will generally be lower than a year ago. Many customers continue to benefit from smoothing and the guarantees that apply to their maturity and retirement payouts.

Margaret Flaherty, With-Profits Communications Manager, Standard Life Assurance Limited, said: "2008 was a poor year for investment returns, with the FTSE All Share Index falling 32.8% over the year.

Obviously, this has had an impact on the assets that back all types of equity-related investments, including with-profits funds. We have therefore made changes to final bonus rates and some annual bonus rates to ensure we continue to treat all our with-profits customers fairly.

"Payout values for the majority of plans affected by this declaration will have recovered some of the ground lost at our last bonus review, in October 2008. Over the last 12 months the impact on plan values will not be as severe as the drop in the FTSE All Share Index because of the broad mix of assets in the with-profits fund, and the impact of any smoothing and guarantees that apply.

"With-profits plans are still providing some protection from the worst effects of the significant stock market falls during 2008 for customers reaching maturity or securing their benefits at retirement age. For example, the return since February 2008 on a 20 year savings endowment maturing now has been -4.4% compared to a much more significant drop in the value of the backing assets."