Press releases

Legal & General Announces Strong Growth for with Profits Customers

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.

Long-term Returns Continue To Be Well Above Inflation…

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.

Asset Allocation:
Asset allocation for With Profits Growth Bonds, With Profits Endowments and With Profits Pensions
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%
Bond Investors:
10 Year Return for £10,000 invested in a Legal & General With Profits Growth Bond
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%

Endowment Mortgages:
25 year mortgage endowment maturing on 1 March 2017 (male aged 29 at entry)
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%

Pension Savers:
Value of With Profits Pensions for a male retiring at age 65, paying monthly contribution of £200
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%

Notes to editors

Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with international businesses in the US, Europe, Middle East and Asia. With almost £1.3 trillion in total assets under management*, we are the UK’s largest investment manager for corporate pension schemes and a UK market leader in pension risk transfer, alternative asset origination, life insurance, workplace pensions and retirement income. Through inclusive capitalism, we aim to build a better society by investing in long-term assets that benefit everyone.

* at 30 June 2021