Legal & General today announced a year of strong performance of the assets held for their with profits policyholders with a return of 15.3% (before tax) for the 12 months to 31 December 2016.
16 Feb 2017
The company added bonuses worth £316 million to its with profits policies last year. This is lower than the £366 million added in 2015, reflecting a gradual reduction in the number of customers as policies continue to mature.
Over 25 years the assets held on behalf of Legal & General’s with profits policyholders have returned 8.6% per annum before tax and over 10 years the annual return is 5.9% 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 |
|---|---|---|
| *Source: ABI UK Balanced (mixed investment 40-85% equity) fund | ||
| Legal & General With Profits | 5.9% (before tax) | 8.6% (before tax) |
| Average balanced managed fund* | 5.2% (before tax) | 7.4% (before tax) |
| Retail Prices Index Inflation (RPI) | 2.8% | 2.7% |
Commenting on our 2016 with profits performance Jackie Noakes, Managing Director Savings, Legal & General Assurance Society said;
“Our with profits customers will benefit from a year of strong investment returns for 2016 of 15.3%. This clearly demonstrates the benefits for our existing customers of remaining invested in a fund with a broad range of assets. It also means that our with profits customers continue to see steady growth on their investments over the long-term, well in excess of inflation."
The fund continues to maintain a broad mix of assets, similar to the asset allocation of previous years.
| As at 31/12/2016 | With Profits Growth Bonds and Endowments | Unitised With Profits Pensions (up to 31/12/1994) |
All other With Profits Pensions* |
|---|---|---|---|
| *Excludes With Profits Annuities and AF4 | |||
| UK shares | 19% | 15% | 16% |
| Overseas shares | 30% | 23% | 25% |
| Fixed interest securities | 39% | 53% | 49% |
| Commerical property | 12% | 9% | 10% |
| Date of investment | Cash-in value as at 18/2/2016 | Cash-in value as at 16/2/2017 | Return over year | Return per annum |
|---|---|---|---|---|
| Invested on 16 Feb 2007 | £12,347 | £13,704 | 11.0% | 3.2% |
| Payment | Total paid | Cash in Value as at 1/3/2016 | Maturity value as at 1/3/2017 | Return over year | Return per annum |
|---|---|---|---|---|---|
| £50 per month level premium | £15,000 | £23,803 | £26,408 | 8.3% | 4.2% |
| Plan Term | Transfer value as at 1/3/2016 | Total payments since 1/3/2016 | Retirement value as at 1/3/2017 | Return over year | Return per annum |
|---|---|---|---|---|---|
| *Assumes level commission | |||||
| 10 year | £27,685 | £2,400 | £32,766 | 9.3% | 6.1% |
| 15 year | £49,670 | £2,400 | £56,979 | 9.7% | 5.9% |
| 20 year* | £74,193 | £2,400 | £83,816 | 9.6% |
5.3% |
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which 39% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also underpin our leading retirement and protection solutions. We are a leading international player in Pension Risk Transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.
*as at HY 2023