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 information here

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 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 income is included in your yearly statement.

This leaflet explains the 2022 Smoothed Return Announcement for the Income Choice Annuity.

2022 Smoothed Return Announcement


How does this affect your Income Choice Annuity?

 

Effective Date (Annuity Start Date) 

 

 

Effective date

09/03/09

to 05/04/09

06/04/09

to 05/04/10

06/04/10

to 05/04/11

06/04/11

to 05/04/12

06/04/12

to 05/04/13

06/04/13

to 05/04/14

06/04/14

to 05/04/15

06/04/15

to 05/04/16

06/04/16

to 05/04/17

06/04/17

to 05/04/18

06/04/18

to 05/04/19

06/04/19

to 05/04/20

06/04/20

to 05/04/21

06/04/21

to 05/04/22

2022

19.0%

19.0%

15.0%

15.0%

14.5%

14.5%

14.5%

14.0%

14.0%

10.0%*

10.0%*

10.0%*

10.0%*

9.0%*

2021

5.0%

4.0%

2.5%

2.5%

2.5%

2.5%

2.0%

2.0%

2.0%

0.5%*

0.5%*

0.5%*

4.5%*

 

2020

17.5%

15.5%

13.0%

13.0%

13.0%

13.0%

13.0%

12.5%

12.5%

6.5%*

6.5%*

4.5%*

 

 

2019

2.5%

1.0%

1.0%

1.0%

1.5%

1.5%

1.5%

1.0%

1.0%

1.0%*

4.5%*

 

 

 

2018

12.0%

11.0%

11.0%

11.0%

11.0%

11.0%

9.5%

8.0%

8.0%

6.0%*

 

 

 

 

2017

10.0%

9.0%

8.0%

8.0%

8.0%

8.0%

7.0%

6.0%

6.0%

 

 

 

 

 

2016

5.0%

5.0%

4.0%

4.0%

3.5%

3.0%

2.5%

5.0%

 

 

 

 

 

 

2015

8.5%

8.5%

7.0%

7.0%

6.5%

6.0%

5.0%

 

 

 

 

 

 

 

2014

8.0%

7.5%

6.5%

6.5%

6.5%

6.0%

 

 

 

 

 

 

 

 

2013

6.0%

5.0%

4.5%

4.5%

6.0%

 

 

 

 

 

 

 

 

 

2012

7.0%

6.5%

4.5%

6.0%

 

 

 

 

 

 

 

 

 

 

2011

9.0%

7.1%

6.5%

 

 

 

 

 

 

 

 

 

 

 

2010

8.5%

7.1%

 

 

 

 

 

 

 

 

 

 

 

 

2009

7.1%

 

 

 

 

 

 

 

 

 

 

 

 

 


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

Source: Prudential. We can't predict the future. 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 isn't guaranteed until it becomes payable at the next plan anniversary.


Information about our With-Profits Fund

The Prudential Assurance Company Limited With-Profits Fund is one of the largest and financially strongest with-profits funds in the UK. The Fund consists mainly of with-profits business, but it also contains a significant amount of non-profits business. More details can be found in our Principles and Practices of Financial Management (PPFM), you can find this on our website pru.co.uk/ppfm.

The total level of assets backing the with-profits business in the Fund was £126.5bn at 31 December 2021.

Smoothed Returns are the way you receive your share of the profits of the Fund.