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Smoothed Return Announcement

In 2021, our globally diversified With-Profits Fund performed well in mostly positive financial markets despite the backdrop of COVID-19 uncertainty. This means all our Income Choice Annuity planholders will receive bonuses that deliver year-on-year increases in income, after allowing for the Required Smoothed Return (RSR).

This year, we’ve also got additional money in the With-Profits Sub Fund to share with our Income Choice Annuity planholders. Because of this, we’ve increased the unsmoothed value of plans by 1.75%. This is reflected in our Smoothed Returns from this year. There’s a chance we might have to take back this increase in the future. You can find out more on our website at:   pru.co.uk/aboutadditionalsurplus

In 2022, the team will continue to take decisions that allow them 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.

We aim to ensure those with an annuity get their fair share of the With-Profits Fund's investment returns via the announced Smoothed Return. In addition to the investment returns on the Fund, the Smoothed Returns we announce depend on several factors including:

  • the effective date of the annuity

  • how we expect investments to perform in the following months

  • our views on mortality

  • adjustments for smoothing

  • your Plan's charges.

The announced Smoothed Return can be changed and isn't guaranteed until it's due to be paid on your clients next Plan anniversary. It could even be negative, for example, if stock markets perform badly. The effect of the Smoothed Return we announce on your clients income is included in your yearly statement. This webpage explains the 2022 Smoothed Return Announcement for the Income Choice Annuity.

See the bonus declaration for the With-Profits fund.

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

How does this affect the Income Choice Annuity product?
 

Announced Smoothed Return Year

Effective Date (Annuity Start Date)

2022

2021

2020

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

09/03/09
to 
05/04/09
19.0% 5.0% 17.5% 2.5% 12.0% 10.0% 5.0% 8.5% 8.0% 6.0% 7.0% 9.0% 8.5% 7.1%
06/04/09
to 
05/04/10
19.0% 4.0% 15.5% 1.0% 11.0% 9.0% 5.0% 8.5% 7.5% 5.0% 6.5% 7.1% 7.1%  
06/04/10
to 
05/04/11
15.0% 2.5% 13.0% 1.0% 11.0% 8.0% 4.0% 7.0% 6.5% 4.5% 4.5% 6.5%    
06/04/11
to 
05/04/12
15.0% 2.5% 13.0% 1.0% 11.0% 8.0% 4.0% 7.0% 6.5% 4.5% 6.0%      
06/04/12
to 
05/04/13
14.5% 2.5% 13.0% 1.5% 11.0% 8.0% 3.5% 6.5% 6.5% 6.0%        
06/04/13
to 
05/04/14
14.5% 2.5% 13.0% 1.5% 11.0% 8.0% 3.0% 6.0% 6.0%          
06/04/14
to 
05/04/15
14.5% 2.0% 13.0% 1.5% 9.5% 7.0% 2.5% 5.0%            
06/04/15
to 
05/04/16
14.0% 2.0% 12.5% 1.0% 8.0% 6.0% 5.0%              
06/04/16
to 
05/04/17
14.0% 2.0% 12.5% 1.0% 8.0% 6.0%                
06/04/17
to
05/04/18
10.0%* 0.5%* 6.5%* 1.0%* 6.0%*                  
06/04/18
to
05/04/19 
10.0%* 0.5%* 6.5%* 4.5%*                    
06/04/19
to
05/04/20
10.0%* 0.5%* 4.5%*                      
06/04/20
to
05/04/21
10.0%* 4.5%*                        
06/04/22
to
05/04/22
9.0%*                          

*This applies to customers originating from our Flexible Lifetime Annuity (FLA) only.

Source: Prudential

Past performance isn't a guide to future performance. Changes in the income payable from an Income Choice Annuity will depend on the relationship between the Smoothed Return announced and the Required Smoothed Return needed to maintain the customer's chosen income. The income from an Income Choice Annuity can fall as well as rise at each plan anniversary. The Smoothed Return can be changed and it is not guaranteed until it becomes payable at the next plan anniversary.

Related Content

PruAdviser - With Profits bonus rate

We have a summary of 2022 annual bonus rates and with-profits declaration that you can share with your clients. Find out more here.

Regular and Annual Bonuses

See the With-Profits fund announced smoothed returns for our Income Choice Annuity product.