Frequently Asked Questions

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You asked: What is a regular bonus?

How they work varies depending on how you've invested in our With-Profit Fund.

If you're an investment bond, unitised pension or unit-linked endowment customer

Your share of the With-Profit Fund is calculated in units. We add the regular bonus to your plan by increasing the price of the units you have. So while the number of units you hold remains the same, the value of these units increases - reflecting how the fund has performed.

Read how the With-Profit Income Fund works slightly differently.

If you're a conventional pension or endowment customer

You can receive two types of regular bonus, which are added on top of the initial guaranteed amount. They are calculated as a proportion of the initial guaranteed amount and as a proportion of any bonuses we've added previously. Once added, we guarantee that the regular bonus will be paid at your chosen retirement date, maturity date or if you die.

Please note: A regular bonus is not the same as gaining interest from a bank or building society. It is not guaranteed that a bonus will be added every year, unless your plan has a guaranteed bonus.

If you're a With Profits Pension Annuity customer

Returns earned by the fund are added to your pension income through a regular bonus and an additional bonus. We calculate the amount of each bonus as a percentage of your fund and list them in your annual statements.

One of the aims of the With Profits Pension Annuity is for the cost of guarantees to be shared by all With Profits Pension Annuity planholders. We aim to strike a balance between providing the possibility of high profits with guarantees to protect benefits if the performance of investments is worse than expected.

The actual percentages will vary over the period of your plan. But generally, the regular bonus rate is more stable than the additional bonus rate.

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