Standard Life has cut bonus rates - again

Milarky

It's not official as there's been no bonus declaration yet (not even a 'no-bonus' declaration) but it looks as though they have cut terminal bonus rates again for 1st February. This affects both maturing and non-maturing policies.

My policy with them has 18.5 years on the clock. Last month the terminal bonus rates on 18 year and 19 year-old policies stood at 2% (and had since 1st August 2005). This month that 'final bonus' item has gone zero. All they would pay out on now is the proportionate value of sum assured plus previously added annual bonus. If they do have any terminal bonsus left at this stage, in other words, it would be for 20+ years only I am guessing.

Anyone else know any more yet?

(There's a smell around them, and it ain't 'jasmine' )

Jo_anne_2

That's interesting, if a bit worrying. We have 2 Std Life endowments maturing in 2008 and 2010. Where do you find the info on terminal bonuses?

EdInvestor

Can't say it's surprising.The two insurers that have reported so far - Friends Prov and Norwich Union have both cut payouts on maturing policies, although annual bonuses are up a bit.

I'm afraid the bad news is not over yet for WP investors.

dunstonh

It's no surprise with Standard Life. Getting ready for the mass exodus. Cut bonuses now and see how many remain before increasing them again. That is unless too many leave, in which case it could be a while before they do.

As for NU, to say they have but payouts on maturities would be inaccurate. Their press release states "most final bonus rates have increased". To me that reads most have increased which means some have gone down but most have gone up. Quite a bit different to "Norwich Union have cut payouts".

ReportInvestor

I think you are wrong to equate bonus cuts and the timing of demutualisation.

Bonus cuts are an unavoidable response to long term overbonussing, probably worse at Standard than elsewhere.

At the Investors Association we suggested that investors nearing their 25th year policy anniversary should consider cashing in their policies three years ago, to take advantage of Standard's extraordinary generosity up to that point.

To Joanne, you will now almost certainly have to hang on for the windfall and hope the company is in good enough shape to be valued along with the likes of Legal & General.

EdInvestor

ReportInvestor wrote:

Bonus cuts are an unavoidable response to long term overbonussing, probably worse at Standard than elsewhere.

Along with the disastrous "equity punt" of 2001-02 when the former directors lost 80% of the WP fund, of course.That's probably responsible for at least half the cuts - at least hopefully we will get some of that money back at the DM.

dunstonh

I think you are wrong to equate bonus cuts and the timing of demutualisation.

Bonus cuts are an unavoidable response to long term overbonussing, probably worse at Standard than elsewhere.

It would be foolish for the directors, or acturies, to not consider the massive outflow that is likely to occur after DM.

Of course, their past actions put them in a very poor position.

Milarky

Partial Reinstatment of minimal terminal bonus

Today my policy has upticked in value from the a few days ago when last checked. This takes into account the bonus rate declaration today. (I got a minimal annual bonus - 0.5 percent and 0.25 percent - the same as last year added also).

The final bonus rate for 18/19 years now appears to be 1.5%. But since my policy is exactly in the middle, and I've never known SL to employ non-integer percentages on TBs, I'm guessing that actually translates as a cut to 1% (was 2%) at 18 years and unchanged at 2% (was 2%) at 19 years.

Also, just looking at how my policy has 'performed' overall:

Since Feb 2003 (at the low point) it has 'returned' about 4% pa net of premiums

In the 15.5 years up to (and including) the cuts to February 2003 it's return then stood at about 4.8% pa net of premiums.

[Endowments - almost as good National Savings on grey day!]

HTH

Lorian

Milarky wrote:

Partial Reinstatment of minimal terminal bonus

Today my policy has upticked in value from the a few days ago when last checked. This takes into account the bonus rate declaration today. (I got a minimal annual bonus - 0.5 percent and 0.25 percent - the same as last year added also).

How do you find out the value?

Milarky

Lorian wrote:

How do you find out the value?

You register for online servicing and login via this page:

http://portal.standardlife.com/content/index.html

Alternatively, you can phone them up and they should have access to the same computer records from their end and be able to tell you

(0131) 225 2552

Lorian

Milarky wrote:

You register for online servicing and login via this page:

http://portal.standardlife.com/content/index.html

Alternatively, you can phone them up and they should have access to the same computer records from their end and be able to tell you

(0131) 225 2552

Thanks. I'd forgotten I'd registered in 2002.

Wish I hadn't looked though!