Prudential With-Profits retains its record of delivering strong returns for customers

Location: London

Date: 20 February 2018

Our With-Profits fund has had another successful year's performance in 2017, yet again reinforcing the benefits to cautious investors of continuing to invest in our well-managed, financially strong and globally-diversified fund.

  • Prudential's consistent, long-term approach to the management of its With-Profits Fund continued to benefit policyholders during 2017.
  • An estimated £2.1 billion was added to Prudential with-profits policy values in 2017 (split £0.4 billion Annual Bonus and £1.7 billion Final Bonus).
  • Policyholders will typically see year-on-year increases of between 7 per cent and 10 per cent in their accumulating with-profits policy values following the 2018 Bonus Declaration.

Strong annualised post-tax returns for policyholders over the lifetime of their policy:

Prudential With-Profits Flexible Investment Plan (20 year, £10,000 single premium) 5.1 per cent *
Prudential With-Profits Flexible Investment Plan (15 year, £10,000 single premium) 6.1 per cent *
Prudential With-Profits Flexible Investment Plan (10 year, £10,000 single premium) 5.3 per cent *
Prudential With-Profits Individual Pension (20 year term, £200 pm RP) 5.7 per cent *
Prudential With-Profits Savings Endowment (25 year term, £50 pm RP) 5.3 per cent *
Scottish Amicable With-Profits Savings Endowment (25 year term, £50 pm RP) 5.3 per cent *
(* Net of tax where relevant and charges. Endowment examples based on male aged 29 at start of contract.)

  • A typical Prudential mortgage endowment maturing in 2018 will have increased in value by 8.8 per cent in its final year.
  • An estimated £21 billion has been added to Prudential with-profits policy values over the last 10 years.
  • Prudential's With-Profits Fund has delivered a cumulative investment return of 89.6 per cent over 10 years, compared with the FTSE 100 index (cumulative total) return of 73.8 per cent over the same period.
  • With-profits with Prudential continues to be an attractive medium to long-term investment when compared with many other alternative investment options.

Clare Bousfield, Chief Executive, Prudential UK, said: "Our With-Profits fund has had another successful year's performance in 2017, yet again reinforcing the benefits to cautious investors of continuing to invest in our well-managed, financially strong and globally-diversified fund.

"The good news is that the vast majority of our with-profits policyholders have seen the value of their plans increase over the last 12 months. Our consistent long-term approach to managing the Fund means that we've been able to maintain annual bonus rates at the same levels as last year while increasing final bonus rates for most customers."

Prudential has announced that it has added an estimated £2.1 billion to with-profits policy values in 2017, highlighting the returns available to cautious investors from a financially strong and well-managed with-profits fund.

Prudential's With-Profits Fund has delivered a gross cumulative investment return of 89.6 per cent over 10 years, compared with the FTSE 100 (total return) index gross return of 73.8 per cent over the same period.

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Notes to Editors

To view the underlying investment performance for 2017 and the asset mix of the Prudential With-Profits Fund view the full press release and editors notes.

Financial Performance and Policy Value Notes:

  1. Gross cumulative return before charges and smoothing.
  2. Comparison between Prudential products and other returns are for periods to 1 May 2018 and are after charges.
  3. 90 Day Notice account, unit trust values and unit-linked life and pension fund values use actual returns from 1 May in the relevant year through to 31 December 2017 and are then projected to 1 May 2018 using the most recent returns for the 90 Day Notice accounts and 3.4 per cent per annum (2.9 per cent net) for unit trust and unit-linked fund values.
  4. Morningstar UK Savings £25,000 investment is a representation of a 90 Day notice account. Rates assumed are gross of tax for the Individual Pension and net of tax for Prudence Bond. The unit trust returns are based on an average for the “IMA Mixed investment 20% - 60% shares” sector. The unit-linked life fund returns are based on the average returns in the ABI “Mixed investment 20% - 60% shares UK Life” category. The unit-linked pension fund returns are based on the average in the ABI “Mixed investment 20% - 60% shares UK Pension” category.
  5. A with-profits investment is not like a bank or building society deposit account. A with-profits policy may return less than has been invested, in particular in the early years, whereas a bank or building society deposit account would return the entire customer’s capital. Investors should consider keeping any money which might be needed in the short-term in a bank or building society deposit account which is generally secure and readily accessible.
  6. Past performance is not a reliable indicator of future performance.
  7. Full details of all annual and final bonus rates are available on request.
  8. FTSE is a trademark jointly owned by the London Stock Exchange Plc and the Financial Times Limited and is used by FTSE International Limited "FTSE" under licence. The FTSE 100 index is calculated solely by FTSE. FTSE does not sponsor, endorse, or promote this product and is not in any way connected to it and it does not accept any liability in relation to its issue, operation and trading. All copy rights in the index values and constituent list vest in FTSE.

About M&G Prudential

Prudential UK is part of M&G Prudential, the UK and European savings and investment business of Prudential plc and was formed in August 2017 from the merger of M&G Investments and Prudential’s UK and European businesses. Managing £337 billion of assets with more than 7 million customers, it brings together two of the most trusted brands in the UK financial services sector.