Features of With-Profits

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There are two types of bonus which may be added to a With-Profits investment.

  • Annual or reversionary bonus may be added every year.

We normally declare annual bonus rates once a year, although this can be more frequent depending on market conditions.

Find out about the With-Profits Annual Bonus Rates Effective from 1st April 2024.

  • A terminal or final bonus may be added at maturity, surrender or when the money is moved out of the With-Profits Fund, for example when the money is switched to another fund – this is designed to reflect each policy’s share of the growth of the underlying investments.

We normally declare terminal bonus rates twice a year, although this can be more frequent depending on market conditions. You can find out more about the latest terminal bonus rates by contacting us directly by telephone on 0808 278 5155.

Mutual Investment Bonus

As a mutual with no shareholders, eligible customers who invest in the With-Profits fund benefit from the success of the fund and its financial strength, reflecting the current and expected economic conditions.

Thanks to our financial strength, over £180m has been added to investments of eligible With-Profits customers through Mutual Investment Bonus over the past five years.

Mutual Investment Bonus is applied as an uplift to investments, representing a 1.5% increase in investments for 2023, and is in addition to the annual bonus provided to customers that receive one. We shared a £54m Mutual Investment Bonus with eligible With-Profits customers in 2023.

In 2024 it has been announced that Mutual Investment Bonus will be increased to 1.85%.

Mutual Investment Bonus is reviewed annually and may increase or decrease in future years. Past performance is not a reliable indicator of future results.


Smoothing is a unique feature of With-Profits contracts. It aims to smooth out some of the peaks and troughs of investment returns. In simple terms, not all the growth made by the fund is paid out in every year. In very good years some of it is held back and is used to supplement poor years.

Although smoothing helps to even out some of the fluctuations in investment values, With-Profits funds are not immune to changing stock market conditions. Smoothing will not stop the value of your plan reducing if investment returns have been very poor or lower than expected for a prolonged period of time.


Because the value of With-Profits investments can go down as well as up some With-Profits investments offer guarantees at certain points. The nature and type of guarantee varies by product and conditions apply to each.

Market Value Reduction (MVR)

The Market Value Reduction (MVR) is designed to protect policyholders within the With-Profits Fund, from the actions of other policyholders who decide to withdraw their investment.

The value of your investment in the With-Profits Fund may be reduced to reflect market conditions on full or partial withdrawal. This reduction is called a Market Value Reduction (MVR). This would reduce the value of your investment and is most likely to happen following a large or prolonged fall in the stock market, or after a period where investment returns are regularly below the level we normally expect. This applies at any time other than on the death of the life assured or where a specific guarantee applies.