Prudential Cuts Bonus
Prudential has cut its annual bonuses by between 6% to 10% on its £65BN with-profits (such an ironic name) fund. Approximately 4.5 million policyholders are now facing cuts, some of which are up to 10%, in their payouts.
The Prudential says that it is acting in the best interests of the fund, and cushioning policyholders against potentially bigger blows.
Surely the purpose of the with profits fund was to smooth the returns in good and bad years, in order to avoid such massive swings?
This cut demonstrates that the concept of "with profits" smoothing has not been properly applied in past years.