Our With-Profits Bonus Declaration - February 2026

How we look after your money

We invest your money in the Prudential Assurance Company Limited With-Profits Fund. The Fund is managed with a long-term approach designed to deliver good outcomes for our customers and treat them fairly. Its size, strong financial position, diversified investment approach and smoothing mechanism helps give our investment and savings customers a steadier investment experience.

Our With-Profits Fund’s investment manager’s aim is to secure the highest total return on your assets (after any tax and investment expenses), while maintaining an acceptable level of risk. This means you can benefit from the fund’s potential for attractive investment performance, while knowing your money isn’t exposed to too much risk. Through its wide-ranging investments, the Fund also helps support the wider economy by investing directly in resources which contribute to a community’s social, cultural and economic well-being – these are known as productive assets.

The Fund uses a smoothing mechanism to reduce the impact from the highs and lows of investment performance. It does this by holding back some returns in stronger years, which can then be used to help support bonus rates in years when returns are lower. This should help give you greater peace of mind over the value of your plan, regardless of when you choose to take your money.

How our Fund performed

The returns for the Prudential Assurance Company Limited With-Profits Fund (in which most of our with-profits investment and savings plans are invested) over the last 1, 5 and 10 years to 31 December 2025 are shown below. We aim to pay you a fair share of the investment return over the lifetime of your Plan and generally, the better our With-Profits Fund performs the more scope we‘ll have to pay bonuses. Please remember the total bonuses added 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.

Source: Prudential. These cumulative and annualised returns 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. Please see information specific to your Plan to find out more. A cumulative return is the total return earned over the period, so, for example, a cumulative return for 10 years represents how much the Fund returned in total over the 10 years. An annualised return is the average return earned each year over the period, so, for example, an annualised return for 10 years represents how much the Fund returned, on average, in each of those individual 10 years.

We can’t predict the future so past performance isn’t a guide to future performance. The value of your investment can go down as well as up so you might not get back the amount you put in.

What are bonus rates and how do we set them?

Regular and Final Bonus rates are how you receive your share of the Fund’s profits. Different types of plan receive different bonus rates. 

When we set Regular Bonus rates, we look at the return we expect our investments to earn in the future. We hold back some of this return, with the aim of paying part of it as Final Bonus when you claim. This helps keep the cost of all guaranteed benefits at a sustainable level, maintain investment flexibility and protects all our customers.  We don't guarantee that a Regular Bonus will be added each year, but once added to your plan it can only be removed in certain circumstances, for example if you decide to take money out of your investments or savings plan early.

For Final Bonus rates, we aim to set bonuses so the total return on customers’ plans represents a fair share of the Fund’s profits over the lifetime of their investments. Final Bonus isn’t guaranteed, and we can change this if we need to in order to ensure the fair treatment of all our customers.

Where applicable, our Final Bonus rates include additional money we shared with some of our with-profits customers as part of previous years’ Bonus Declarations. To protect the interests of all customers, we may need to take back this additional money in the future. There’s currently no expectation this will happen, and we would only expect to consider it in very unusual circumstances, such as a significant market crash.

Prudential Guaranteed Income Plan

Backed by its long-term, customer-focused ethos, our With-Profits Fund is broadening out into new solutions to meet customer needs for certain levels of income and lump sum payments. 

Our Guaranteed Income Plan is the first of these new solutions we introduced in 2025. It provides guaranteed benefits through a regular income and/or a lump sum, without needing a lifelong annuity commitment. It’s backed by a fixed income investment strategy within our With-Profits Fund, which is designed to meet those guaranteed benefits. As it’s designed to meet different customer needs, the investment strategy is different from that used for our investments and savings plans. It focuses on giving us as much certainty as possible that we can meet the guaranteed payments. The low level of risk also means it has a lower expected investment return. 

We may be able to pay a little more in the form of a bonus than the guaranteed regular income and/or lump sum, if the fixed income assets backing the Guaranteed Income Plan outperform what’s required to support those guarantees. This year, I’m pleased to announce the first annual bonus for our Guaranteed Income Plan is 0.45%. 

The bonus we’ve declared reflects a fair share of the profits on this fixed income investment strategy in our With-Profits Fund over 2025. The performance of the fixed income assets can change over time, so the bonus may change each year and isn’t guaranteed. A declared bonus can be changed at any time, although the change will only impact plans that have a plan anniversary between the date we make the change and the end of the bonus year (5 April) in which the change is made.

Details of how this bonus declaration impacts individual plans will be confirmed in the annual benefit statement issued approximately 50 days before the plan anniversary.

And something to be aware of

If you withdraw or switch money early from our With-Profits Fund, for example before your selected retirement date for a pensions product, you may get less than the value of your plan. This way we can make sure everyone invested in the fund gets a fair share of the profits, and we protect the interests of all our customers. We call this a Market Value Reduction (MVR). It ensures that what we pay out is based on the underlying market value of the investments. An MVR applies depending on the type of plan you have. For example, we don’t apply an MVR to our Guaranteed Income Plan. 

In 2026, we’ll continue to evolve portfolios and capture new investment opportunities from around the world.

Thank you for investing with us.

Clive Bolton
Life CEO at M&G