Bonus Declaration FAQs February 2025

Who is affected by the Bonus Rates Announcement?

All Prudential customers who have a With-Profits element to their plan, except for investments made in any of the PruFund funds.

These include:

What bonus rate will I get as a result of this year's declaration?

Annual/Regular and Final Bonuses are the way you receive your share of the profits of the Fund. Different types of plan receive different bonus rates. See the Annual/Regular Bonuses for our With-Profits products.

In 2024, the ability to invest in a wide range of assets across regions and both public and private markets, once again benefitted the With-Profits Fund in an environment where many markets saw growth despite uncertain economic conditions.

So, we’re pleased that in 2025:

Our Final Bonus rates include, where applicable, additional money we shared with some of our With-Profits customers as part of previous years’ Bonus Declarations. Your Final Bonus isn’t guaranteed. There’s also a chance we might have to take back the additional money distributed (in previous years) in the future, to protect the interests of all customers. Unless something very unusual happened, we wouldn’t expect to have to do this.

In 2025, our With-Profits Fund managers will continue to evolve portfolios and capture new investment opportunities from around the world. Our managers 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 customers.

Any final bonus declared in February 2025 may be payable when customers leave the With-Profits Fund, in the forthcoming bonus year. Any final bonus isn’t guaranteed.

How do I find out how the declaration impacts me?

We will send you a statement each year, which will show the impact of the bonus declaration on your Plan. See the bonus rates declared for your product.

What determines what I might get back?

There are a number of factors that affect the amount you get back from your Plan, which cannot be predicted. These include:

*Our With-Profits Fund aims to smooth some of the extreme ups and downs of investment performance in order to provide a more stable return from year to year.

Why is the return on my Plan different to the overall return for the With-Profits Fund?

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 that the total bonuses added to your Plan won’t reflect the performance of the underlying fund exactly because of, for example:

Please see information specific to your Plan to find out more.

How strong is the Prudential With-Profits Fund?

The Prudential Assurance Company Limited With-Profits Fund is the largest With-Profits fund in the UK and is financially very strong.

The size and strength of our Fund allows us to invest in a very wide range of assets and individual companies. As a diversified fund we invest in the shares of hundreds of companies that will be familiar to customers. Importantly, a key strength of the Fund is the ability to capture opportunities directly in high quality property and infrastructure projects in the UK and around the world. Two examples are:

40 Leadenhall - through our allocation to UK Property, the With-Profits fund has invested in 40 Leadenhall, a prime City of London office valued at close to £1bn. This building has one of the highest Environmental, Social and Governance (Global Real Estate Sustainability Benchmark) standards possible, and was already c90% pre-let ahead of practical completion. It has been a top performer over 2024 as this was recognised in its valuation contributing significantly to the c7.5% return from UK Property. Whilst the future of offices was uncertain throughout Covid, this is a great example of using our scale to invest in super prime offices that are able to generate strong returns through a challenging market.

The Catalyst investment strategy - is a multi-billion global mandate investing in companies with innovative solutions to some of the world’s biggest social and environmental challenges. Many private companies are increasingly unable to grow due to difficulties in raising capital and this strategy plays a role in filling this gap. This size of investment demonstrates our commitment and means a portion of customers’ money invested in the With-Profits Fund is used for investment in companies with good growth potential, that are not readily accessible to other investors.

The With-Profits Fund predominantly invests within public markets and the two examples of private market investments are just a small proportion of the overall fund.

Following the merger of the Scottish Amicable Insurance Fund (SAIF) with the With-Profits Sub Fund how is my plan affected?

Following the merger of the SAIF fund with the with-profits sub-fund (WPSF) on 1 April 2021, ex-Scottish Amicable With-Profits customers are now invested in the WPSF.

I have a mortgage endowment with Prudential - what does a red, green or amber letter mean for me?

You should have received regular letters over the last few years telling you whether your Plan is on track to repay your mortgage. These are called re-projection letters. We monitor how many of our endowment customers plans are and aren’t expected to meet their repayment targets, based on accepted industry guidelines. We show this on your letter as red, amber or green. Green means it’s on track (but not guaranteed) and likely to meet repayment targets. Amber means there might be a shortfall. Red means there’s likely to be a shortfall.

If it’s amber or red, the letter will also tell you what your options are and what you need to do next.

I have a mortgage endowment plan with Prudential and I’ve had a letter saying it might not be enough to pay off my mortgage. What action should I take?

As a result of turbulent market conditions in some past years, the payouts of some mortgage endowment plans may have fallen. This could mean that the amount you receive from your Plan may not be enough to pay off your mortgage, and you may have a shortfall. If you've had a letter from Prudential we understand that you may be concerned about what to do next.

You’ve got two main options:

If your Plan is the only way you have of paying off your mortgage, you should speak to your mortgage lender right away. If you want more information you can write to Prudential, Lancing, BN15 8GB, quoting your Plan number.

What are your thoughts on future bonus rates?

Future bonus rates will depend on how well the Fund does in the future. The Prudential Assurance Company Limited With-Profits Fund is the largest With-Profits fund in the UK and is financially very strong. The size and strength of our Fund allows us to invest in a very wide range of assets and individual companies.

Are you making changes to your Market Value Reduction (MVR) approach?

A Market Value Reduction (MVR) is a deduction we may make on certain withdrawals or switches from, or between, our With-Profits Funds. We're not currently planning any changes to our MVR approach. We regularly review our approach in the light of emerging market conditions and reserve the right to change this without notice. For more information on an MVR please see our Market Value Reduction - A clear explanation document.

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