Aviva today announces that it has increased final bonuses and reduced market value reductions (MVRs) for unitised with-profits customers. Investors have seen strong growth in their investments during 2010 and £1.45 billion in bonuses have been added to customers’ policies.
Highlights
– The main Aviva With-Profit Fund grew by 12% (gross) in 2010. Equities and property now account for 66% of the fund.
– Final bonus rates for bond customers have typically increased by 6% and MVRs reduced by an average of 4% during 2010.
– 70,000 with-profits bond customers will benefit from valuable guarantees in 2011.
– A with-profits bond investment of £10,000 held for 10 years in January 2011:
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- Has grown in 2010 by £1,168, or 10.1% (after tax and charges)
- Is worth £14,680 (with no-MVR guarantee) – a return of 3.9% annually
- Outperformed a bank or building society average savings account which returned 2.3% a year (after basic rate tax and charges).
– A 25-year £50 a month mortgage endowment* started on 1 January 1986:
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- Has a maturity value of £33,937 and grown 7.6% in 2010,
- Annual return of 6% compares favourably with 3.4% from an average bank or building society savings account. (All figures net of basic rate tax). *Invested in Old & New With-Profits Sub Funds (ex-CGNU fund).
David Barral, chief operating officer at Aviva, said: “Aviva’s with-profits investors have enjoyed good returns over 2010 and our funds continue to deliver steady returns for cautious investors. We’ve increased unitised final bonus rates, reduced MVRs and a 10-year bond with the no-MVR Guarantee gives an annual return of 3.9%, outperforming average savings accounts. This is impressive when you consider that we have been through two bear markets in the last decade with the FTSE-100 returning 2.9% annually over the same period. We’ve also increased investment in equities with the aim of maximising potential returns.”
Source : Aviva Press Release
