With-Profits Bonus Declaration February 2023
In 2022, our globally diversified With-Profits Fund performed very effectively in extremely challenging investment markets, providing some protection to our investors.
As a result of this performance I’m pleased to announce that this year, Annual Bonus rates have either increased or been maintained at the same level as declared last year, which will continue to add to the guaranteed benefits of customers. Most of our customers will see small decreases in Final Bonus rates, but due to Annual Bonus additions will see small increases to their plan values.
I’m also delighted to announce we’ve shared additional money in one of our funds with some of our customers. This is the third time in four years that we’ve shared additional money, and the total amount shared now stands at £3.5 billion. Some of our With-Profits customers invested in our With-Profits Sub Fund have received a share of this additional money. You can find out more on our website at pru.co.uk/aboutadditionalsurplus
How we look after your money
We invest your money in the Prudential Assurance Company Limited With-Profits Fund, which is one of the largest and 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.
Our aim is to secure the highest total return for the Fund (after any tax and investment expenses), while maintaining an acceptable level of risk and protecting you, our With-Profits customers.
How our Fund performed
The table below shows the returns for The Prudential Assurance Company Limited With-Profits Fund over the last 1, 5 and 10 years.
Performance of our With-Profits Fund in the 1, 5, 10 years to 31 December 2022 |
|||||
|---|---|---|---|---|---|
Fund |
1 year Fund return % |
5 year Cumulative |
10 year Cumulative |
5 year Annualised Fund return % |
10 year Annualised Fund return % |
Prudential With-Profits Fund (after tax) |
-1.1 |
18.5 |
74.3 |
3.5 |
5.7 |
Prudential With-Profits Fund (before tax) |
-1.5 |
21.6 |
90.2 |
4.0 |
6.6 |
Source: Prudential. These values are before charges and the effects of smoothing and are for the main asset pool in our With-Profits Sub-Fund, which is relevant to the vast majority of our customers. Fund returns do not include the additional surplus shared as part of the Prudential Assurance Company Limited final 2020, 2022 and 2023 bonus declarations.
For investments in our With-Profits Fund, the value of your plan depends on how much profit the Fund makes, and how it’s shared out as bonuses. When we take these factors into account, the bonuses we’re adding to your plan won't reflect the performance of the underlying fund exactly because of, for example, charges, the effects of smoothing and any applicable tax. You can find more information in your yearly statement.
We can’t predict the future so past performance isn’t a guide to future performance. The value of your plan can go down as well as up so you might not get back the amount you put in.
How we set our bonus rates
For Annual Bonus rates, we look at the economic outlook and the returns we expect our investments to earn in the future. The Annual Bonus rates we've announced show the With-Profits Fund has the investment flexibility to cope with market volatility and continue to deliver competitive overall returns.
For Final Bonus rates, we aim to ensure the total return on customers’ plans represents a fair share of the Fund’s profits earned over the lifetime of their plans. This is after taking into account, for example, charges, the effects of smoothing and any applicable tax.
Our Final Bonus rates include, where applicable, additional money which is further to the additional money we shared in 2020 and 2022. Your Final Bonus isn’t guaranteed. There’s also a chance we might have to take back the additional money in future, to protect the interests of all customers 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.
How we apply a Market Value Reduction
Sometimes, we may need to apply a Market Value Reduction if you decide to take money out of your plan. This will depend on the type of plan you have. This will reduce your fund value, but we’ll do this to make sure you get a fair plan value.
In 2023 we'll continue to manage the Fund in a prudent manner, just as we always have.
Thank you for investing with us.
Andrea Rossi
Chief Executive, M&G plc
Related content
Bonus Declaration FAQs February 2023
Find out who is affected by the bonus rates announcement and how you can find out if it affects you.
With-Profits FAQs February 2023
The frequently asked questions give high level information about investments in With-Profits.
Annual Bonus Rates Table February 2023
View our Regular/Annual Bonuses that will be added to our With-Profits range from 1 April.
© Prudential 2023
"Prudential" is a trading name of Prudential Distribution Limited. Prudential Distribution Limited is registered in Scotland. Registered Office at 5 Central Way, Kildean Business Park, Stirling, FK8 1FT. 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 Limited. The Prudential Assurance Company Limited and Prudential Distribution Limited are direct/indirect subsidiaries of M&G plc which is a holding company registered in England and Wales with registered number 11444019 and registered office at 10 Fenchurch Avenue, London EC3M 5AG, some of whose subsidiaries are authorised and regulated, as applicable, by the Prudential Regulation Authority and the Financial Conduct Authority. 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.