Bonus declaration overview.
ANNUAL BONUS DECLARATION
On Thursday 15 February 2018, we announced bonus rates for all our with profits plans for 2017, after delivering a return of 8.1% 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 6.3% per annum before tax. Past performance is not a guide to future performance.
Commenting on our 2017 with profits performance Jackie Noakes, Managing Director Savings, Legal & General Assurance Society said:
“Our with profits customers will benefit from another year of good investment returns for 2017 of 8.1%. This demonstrates the benefits for our existing customers of investing in a fund with a broad range of assets. It also means that our with profits customers have continued to see steady growth on their investments over the long-term, in excess of inflation.”
INVESTMENT MARKETS - A REVIEW OF 2017
Major global developed economies grew modestly during 2017. The US economy recovered after a disappointing first quarter as consumer spending and business capital expenditure picked up. In the UK, both economic and political uncertainty heightened following the general election result in June and the start of Brexit negotiations. Towards the end of the year economic activity in developed markets was most pronounced in the Eurozone, with economic confidence recording its highest level for more than a decade. 2017 saw the first increase in the rate of economic growth in emerging markets following six years of successive slowdowns. Brazilian and Russian economies improved throughout the year as commodity markets recovered.
Equity markets delivered strong positive returns with emerging markets outperforming developed markets. European equities were the best performing of the developed equity markets on clear signs of economic recovery. Japanese equities also performed well with the snap general election giving further support to Prime Minister Shino Abe’s reform drive. Elsewhere, equity returns in the US and UK were also positive as their economies continued to grow.
Government bond markets were held back by rising long-term interest rates in 2017, leading to weak returns. Global corporate bond markets had a broadly positive year thanks mainly to a continued backdrop of improving global economic growth and contained inflation levels. As with equity markets, global corporate bond markets remained resilient to warning comments from central banks, with investors judging that rising interest rates were an inevitable result of continued global economic growth.
In the UK commercial property market, capital growth in the industrial sector outpaced that of the other main sectors over the course of the year. The pace of rental growth eased considerably during the course of the year but returns overall were positive.
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 ten 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.
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:
UK and overseas shares
Fixed interest securities
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 2017.
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 2018:
- With profits annuities - March 2018
- With profits bonds - March to May 2018
- With profits endowments and savings plans - May 2018
- With profits pensions - June 2018
To see the investment returns and asset mixes for specific with profits products, please visit the following pages:
Bonds bonus declaration
The value of your investment can fall as well as rise and you could get back less than you invested.