Bonus declaration overview.


On Thursday 19 February 2015, we announced bonus rates for all our with profits plans for 2014, after delivering a return of 9.6% on the assets we hold for with profits policyholders. This return is before we have taken off investment expenses, tax and any policy charges. Over the past 10 years, assets invested for customers in Legal & General’s With Profits Fund have delivered a return of 7.0% per annum before tax. Past performance is not a guide to future performance.


Jackie Noakes, Managing Director, Mature Savings said:

“Our with profits customers will benefit from another year of strong investment returns for 2014 of 9.6%. This clearly demonstrates the benefits for our existing customers of remaining invested with a with profits provider operating active management of a balanced asset mix.

By investing in a broad spread of assets we continue to deliver steady growth to our policyholders who also benefit from protection from market volatility through ‘smoothing’ of payouts."



We made a decision this year to change the look and feel of our bonus declaration communication so there’s a clear distinction between this and your annual statement/review letter. The changes in your bonus letter includes no longer showing the final bonus rate as we have done in previous years as the sole purpose of the bonus declaration letter is to inform you of the annual bonus allocated for 1 January to 31 December 2014. This means that you can’t directly compare the figures in your bonus declaration letter with those in your annual statement/review letter.

This change to our communication does not affect the final bonus that may apply to your policy/plan when you leave with profits. The final bonus rate is still available for your information, but because final bonus is not guaranteed, can change without notice and we may decide not to pay any final bonus we don’t want you to rely on the final bonus being a definite addition to the value of your policy/plan.


A relatively calm start to the year saw stable economic recovery with more developed countries, such as the United States, performing especially well.  However, a sharp fall in the price of oil over the second half of 2014 contributed to concerns about growth in countries that demand a lot of oil, such as China, and also negatively impacted countries that are big producers of oil, such as Russia. 

Equity market returns for the whole of 2014 varied considerably, with US and Japanese markets among the best performers, but with European and UK equity markets lagging behind. Emerging market equities were broadly flat over the year with a similar wide variation of returns between individual countries.  Solid gains from Indian and Chinese equities were offset by poor performance in Russia and Brazil.

Corporate and Government bond returns benefitted from the effect falling oil prices have had on inflation, combined with a general view that interest rates are likely to remain lower for longer in developed economies. European Government Bonds ended the year particularly high as the European Central Bank is expected to start its own version of Quantitative Easing in response to poor growth.

UK Commercial Property had another year of strong performance driven by investors seeking higher-yielding alternatives to Corporate and Government Bonds.  Although London continues to be the main focus for the UK market, investors are increasingly looking for investment opportunities in other cities such as Birmingham and Cambridge.


The graph below shows how the assets we hold for our with profits policies have performed for each of the last eight calendar years, 1 January to 31 December. The performance is a combination of the returns received from all the investments. These investment returns are before we’ve taken off investment expenses, tax and any policy charges. You can find more information about deductions and policy charges in your policy documentation.

Please note that the returns used to calculate bonuses for individual plans over the years will not be the same as those shown below. This may be for a number of reasons, one of which is to reflect the varying features and benefits of different with profits products.

With profits performance graph

Please note that all investment returns are rounded to the nearest percent.

Past performance is not a guide to future performance.

You can find out specific product details by clicking on the relevant link in the left hand navigation.

With Profits Investment Mix

With profits invests mainly in the following asset classes:

UK and overseas shares

With profits invests in shares because they are widely believed to provide the best long-term return. Over the short term, the value of a fund investing in shares can go up and down a lot. Share prices can change dramatically in response to the activities and financial performance of individual companies, as well as being influenced by general market and economic conditions.

Fixed interest securities

With profits invests in fixed interest securities that aim to provide a stable income over a fixed length of time. These are essentially a loan, usually to a company, or sometimes to a government. The return on a fund investing in fixed interest securities comes from the interest that the company or government pays on the loan, and the value of the securities. Fixed interest securities are less risky than shares but are likely to provide a lower return over the long term.

Commercial property

Property fits well in a balanced investment mix as its returns aren’t directly linked to the returns from shares. Investment includes holdings in offices, retail space and industrial property, which can offer good prospects for long-term returns. Commercial property can provide growth through rises in the value of the property and through the steady income stream that can be received from rents.

We invest in a mix of assets, which can help to reduce the impact of poor performance by any one asset type. As the assets react differently to economic factors, when one is not performing well, another may be performing better.

The pie chart below shows the mix of assets for our with profits policies as at 31 December 2014.

With profits asset mix as at 31 December 2011


Bonus statement mailing dates

We send all our with profits customers an annual bonus statement showing how their plan has performed over the previous year. Please use the following dates as a guide to when statements will be mailed in 2015:

  • With profits annuities - March to April 2015
  • With profits bonds - February to May 2015
  • With profits endowments and savings plans - May 2015
  • With profits pensions - June to July 2015
Important information
It's worth remembering that the value of your investment can fall as well as rise and you could get back less than you invested.

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With profits guides

Here you'll find easy to understand factsheets on 'smoothing', market value reductions and bonus declarations.

Frequently asked questions about the With Profits Fund

Take a look at the answers to the most commonly asked questions about the With Profits Fund.

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