Friends Provident Cuts Bonuses
Those long suffering endowment policy holders who have polices managed by Friends Provident will have been disappointed to learn that it will be slashing the final bonuses it pays to long-term savers.
Friends Provident state that the value of its with-profits fund fell by more than 7% during the first half of the year.
Whilst annual bonuses are being maintained, the final bonuses are being cut. Those in the main with-profits fund are being more than halved.
A policyholder with a 15 year unitised pension plan in the main fund will receive a regular bonus of 4%, but their final bonus will be cut from 18.7% if the policy had matured in January to just 2.1% now.
Those with a 25 year policy will be paid a final bonus of 17.5%, a massive reduction from the original 40% in January.
The ongoing credit crisis and recent falls in the stock market are being blamed. All very well, but what about the previous years when the stock market was booming?
A lousy result for those who have spent years investing in these policies.