ANNUAL BONUS DECLARATION

On Thursday 21 February 2019, we announced bonus rates for all our with profits plans for 2018, after delivering a return of -3.3% 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 8.0% per annum before tax. Past performance is not a guide to future performance.

Commenting on our 2018 with profits performance Claire Singleton, CEO Mature Savings, Legal & General Assurance Society said:

“Over the long term our customers have seen strong growth on their investments. The bonuses we are declaring today show how customers in with profits benefit from smoothing in challenging investment markets.”  

INVESTMENT MARKETS - A REVIEW OF 2018

The global economy as a whole continued to grow during 2018, driven increasingly by the strength of local domestic demand in the major economies. However, emerging markets were severely affected by the increasing risk of a US-China trade war and the effect US interest rate increases were having on emerging market investor sentiment. Worldwide, inflationary pressures have remained subdued compared to historical levels. The US Federal Reserve continued to raise interest rates every quarter amidst strong US economic growth. The Bank of England raised the UK base interest rate to 0.75% in August.

Although the global economic background remained broadly supportive for equities, escalating trade tensions between the US and China saw most equity markets fall. US equities were relatively more resilient as economic growth was strong enough to offset the escalating trade tensions. However, in the UK and Continental European markets, political uncertainty had a negative impact on investor confidence and prices fell. Elsewhere fears over rising trade tensions were a drag on export-orientated Asia-Pacific companies. Turkish stocks suffered amid US-imposed sanctions, while political uncertainty and industrial unrest saw equity prices in Brazil fall.

Overseas bond markets saw positive returns but struggled to make much headway as central banks continued to withdraw the extraordinary monetary support that has been in place since the global financial crisis began in September 2008. UK bonds in particular struggled to make any headway because of the continuing uncertainty over the Brexit negotiations with the European Union.

The UK commercial property market also saw positive returns with capital growth in the industrial sector outpacing that of the other main sectors. The retail sector was sluggish relying on rental growth for its marginal positive return as capital values on the high street declined.

WITH PROFITS PERFORMANCE HISTORY

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.

Past With Profits performance  

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 link for the relevant product at the bottom of this page.

WITH PROFITS INVESTMENT MIX

With profits invests mainly in the following asset classes:

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 2018.

With Profits Fund asset mix  

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 2019:

  • With profits annuities - March 2019
  • With profits bonds - March to May 2019
  • With profits endowments and savings plans - May 2019
  • With profits pensions - June 2019

To see the investment returns and asset mixes for specific with profits products, please visit the following pages:
Bonds bonus declaration

Endowments and savings plans bonus declaration

Pensions and annuities bonus declaration