PruAdviser on-line services will be unavailable from 18:00 on Saturday 15 January until 12:30 on Sunday 16 January for website maintenance.

With-Profits Bonus Declaration

Over 2020, The Prudential Assurance Company Limited With-Profits Fund returned 1.5% (net of tax) and 1.7% (gross of tax), both before charges and the effects of smoothing*. Please see information specific to your Plan to find out more.

*This describes the main asset pool in our With-Profits Sub-Fund, which is relevant to the vast majority of our customers.

Please remember that past performance is not a reliable indicator of future performance.

On the Bonus Declaration literature page, you'll find literature and sales aids that you can use to discuss bonus declaration with your clients.

Summary of 2021 annual bonus rates

  Annual bonus rate
Most** Unitised (or accumulating With-Profits) With-Profits bonds 1.25%
Flexible Retirement Plan (including income drawdown) and Trustee Investment Plan (for all new business post 7/11/11) 1.05%
Corporate pensions (unitised) 1.50%
With-Profits Pension Annuity 0.25%
Most^ Unitised (or accumulating With-Profits) Personal Pensions 1.25%

**Most refers to Prudence Bond (Optimum Return) both no initial charge and initial charge versions, International Prudence Bond & Prudential International Investment Bond (Euro), International Prudence Bond & Prudential International Investment Bond (US) and PSA/PIB (Fund over £2). With effect from 01/03/2020, the high tier bonus threshold is reduced from £6,000 to £2 implying all PSA/PIB business receive high tier bonuses from that date going forward.

^Most refers to all Capsil personal pensions. It also applies to Prudential Series A and Premier Plans (including TIP Series A for business sold between 01/01/2003 and 06/11/2011) written on or after 01/01/2003.

In 2020, our With-Profits Fund delivered a small positive return in what was a highly unusual year for global investment markets and that means:

  • We’ve reduced some annual bonus rates slightly. When we set our annual bonus rates, we look at a number of things. These include the economic outlook and the returns we expect our investments to earn in the future. Given the uncertain outlook, we’ve reduced some rates to ensure that our With-Profits Fund remains financially strong and continues to have sufficient investment flexibility to help deliver attractive returns over the medium to longer term.
  • We’ll continue to pay final bonuses meaning that overall plan values will, for the vast majority of planholders, be maintained or show small increases compared to last year.***

We aim to provide fair pay-outs based on what the Fund has achieved over the longer term after taking into account the effects of charges, smoothing and any applicable tax.

In 2021, we’ll continue to manage the Fund prudently. We’ll aim to secure the highest total return for the Fund (after any tax and investment expenses) while maintaining an acceptable level of risk and protecting our planholders.

Read more about With-Profits Bonus Declaration February 2021

***Our Final Bonus rates include, where applicable, additional money we shared with some of our With-Profits customers as part of last year’s Bonus Declaration. Your Final Bonus isn’t guaranteed. There’s also a chance we might have to take back this extra money in future, to protect the interests of all plan holders and the financial strength of our With-Profits Fund. Unless something very unusual was to happen, we wouldn’t expect to have to do this.

Fund size and rating

The Prudential Assurance Company Limited With-Profits Fund is the largest and one of the financially strongest With-Profits Funds in the UK. The size and strength of our Fund allows us to invest in a very wide range of assets and individual companies.

The total level of assets backing the With-Profits business in the Fund was £117.9bn at 31 December 2020.

Fund Management

M&G Treasury and Investment Office (T&IO) are our in-house asset-allocation experts in the UK. They select a wide range of assets to hold in the With-Profits Fund, in line with the Fund's objective. The aim of the Fund is to maximise investment returns while maintaining the financial security of the Fund. 

PAC With-Profits Fund - comparative cumulative and annualised returns over 1, 5 and 10 years

  1 Year return % 5 Years cumulative return % 10 Years cumulative return % 5 Years annualised return % 10 Years annualised return %
Prudential With-Profits Fund (net)* 1.5% 33.2% 77.9% 5.9% 5.9%
Prudential With-Profits Fund (gross)** 1.7% 39.3% 94.5% 6.9% 6.9%
ABI UK - Mixed Investment 20% - 60% Shares Sector Average - Life Funds*** 1.0% 21.0% 46.7% 3.9% 3.9%
ABI UK - Mixed Investment 20% - 60% Shares Sector Average - Pension Funds*** 2.1% 25.7% 58.5% 4.7% 4.7%
FTSE 100 Total Return -11.5% 26.2% 60.2% 4.8% 4.8%
Morningstar 90 Days Notice (UK Savings £25,000+) Net 0.4% 2.3% 5.1% 0.5% 0.5%
Morningstar 90 Days Notice (UK Savings £25,000+) Gross 0.3% 1.9% 4.1% 0.4% 0.4%
UK Retail Price Index 1.2% 13.4% 29.3% 2.5% 2.6%

Source: Prudential, FE. All figures to 31 December 2020

* With-Profits performance is net of tax and before charges and the effects of smoothing. The returns shown are for the main asset pool in our With-Profits Sub-Fund, which is relevant to the vast majority of our customers.
** With-Profits performance is gross of tax and before charges and the effects of smoothing. The returns shown are for the main asset pool in our With-Profits Sub-Fund, which is relevant to the vast majority of our customers.
*** ABI UK – Mixed Investment 20-60% Shares – The Association of British Insurers (ABI) has a classification system whereby the performance of funds that have similar asset allocations are grouped together to give an average performance figure. This is known as the sector average. It's important to note that some if not all of the Funds comprising this sector average will already have fund management charges deducted from their performance.

London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). © LSE Group 2018. FTSE Russell is a trading name of certain of the LSE Group companies. e.g., “FTSE®” “Russell®”, “FTSE Russell®”, “MTS®”, “FTSE4Good®”, “ICB®”, “Mergent®, The Yield Book®,” are a trade mark(s) of the relevant LSE Group companies and are used by any other LSE Group company under license. “TMX®” is a trade mark of TSX, Inc. and used by the LSE Group under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.

"Prudential" is a trading name of Prudential Distribution Limited. Prudential Distribution Limited is registered in Scotland. Registered Office at Craigforth, Stirling FK9 4UE. Registered number SC212640. Authorised and regulated by the Financial Conduct Authority. Prudential Distribution Limited is part of the same corporate group as the Prudential Assurance Company. The Prudential Assurance Company and Prudential Distribution Limited are direct/indirect subsidiaries of M&G plc, a company incorporated in the United Kingdom. These companies are not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in the United Kingdom.