information

We use cookies to give you the best possible experience online. By continuing to use our website, you agree to receiving our cookies on your web browser. Visit our cookie policy page to find out more and how to change your cookie settings.

skip to main content

Catch up with the latest press releases from LV=

Large green heart

LV= announces with-profits performance

Press release: 17/03/2014

Insurance, investment and retirement group LV= today announces its annual with-profits payouts and performance details.

  • The LV= with-profits fund earned an investment return of 11.1% (gross of tax) in 2013.
  • A 25-year policy covering a £50,000 mortgage is currently paying a surplus of £16,592 (for a customer aged 30 next birthday at entry, the maturity value for a 25-year low cost mortgage endowment maturing on 1 March 2014 is £66,592).
  • A £50 a month 25-year savings endowment policy maturing on 1 March 2014 (for a male aged 30 next birthday at entry) will pay out £40,095, equivalent to an annual yield of 7.1%.
  • An announcement regarding any mutual bonus uplift to be added to with-profits payouts will be made on 31 March when LV= announces its full year results.

Philip Moore, Group Finance Director LV=, said: “We are pleased to be reporting a high level of investment return of 11.1% for our members this year. This is 2.5% above the market benchmark. With-profits remain an attractive investment proposition for certain market segments and we are committed to offering great returns to our customers. This excellent performance and the possibility of additional mutual bonuses continue to benefit existing with-profit members as well as for our new propositions - our pension income plus annuity and our flexible guarantee bond.”

Maturity values for mortgage-linked low cost endowments as at 1 March 2014

Policyholder: Male, aged 30 next birthday at entry

25-year endowment

Mortgage amount
Guaranteed death benefit
Maturity value

£50,000
£50,000
£66,592

Surplus £16,592

Equity backing ratio

As at 31 December 2013, the LV= with-profits fund had 47% invested in equities, 8% in property, and 4% in venture funds i.e. 59% of the total was invested in assets with greater potential for long-term growth.

The table below shows the LV= with-profits fund asset allocation both at the end of 2013 and at the end of 2012.

Asset Class

Allocation

31 December 2013

31 December 2012

Equities

46.9%

44.8%

Venture funds

3.8%

4.0%

Property

8.5%

8.1%

UK gilts

27.8 %

28.6%

Corporate Bonds

10.9%

12.1%

Cash/other

2.1%

2.4%

Total

100.0%

100.0%

Share with...

What are these?

  1. Google +1

For further information please contact:

LV=, Emma Banks, emma.banks@LV.com, 0208 256 6714 / 07894 158605

Notes to editors:

1. WITH-PROFITS FINAL BONUS RATES AND PAYOUTS 2014

Conventional with-profits

Policy duration

Policy description

Payout

Final Bonus rate

Equivalent annual rate of return
over the full term

25 years [1]

Ordinary Branch Endowment

£40,096

44.3%

7.1%

25 years [2]

Ordinary Branch Endowment

£3,761

44.8%

6.1%

Notes:
[1] Regular premium of £50 per month for a male aged 30 next birthday at entry, maturing 01/03/2014.
[2] Regular premium of £5 per four week period for a male aged 30 next birthday at entry, maturing 01/03/2014.

Unitised with-profits regular premium policies

Policy duration

Policy description

Payout

Final Bonus rate

Equivalent annual rate of return
over the full term

10 years [1]

Endowment

£7,804

44.3%

7.1%

15 years [1]

Endowment

£13,495

44.8%

6.1%

10 years [2]

Pension Policy

£35,273

31.3%

7.5%

15 years [2]

Pension Policy

£58,377

31.9%

6.2%

Notes:
[1] Regular premium of £50 per month for a male aged 30 next birthday at entry, maturing 01/03/2014.
[2] Regular premium of £200 per month for a male retiring at age 65 on 01/03/2014.
Final bonus is determined individually for unitised with-profits policies.

Unitised with-profits bonds

Policy duration

Policy description

Surrender value as at
1 March 2014

Surrender value a
year ago

Effective return over the year

5 years [1]

With Profits Growth Bond

£13,362

£11,986

6.0%

10 years [1]

With Profits Growth Bond

£19,699

£18,038

7.0%

Notes:
[1] Single premium of £10,000 for a male aged 30 exact at entry, surrendering 01/03/2014.
Final bonus is determined individually for unitised with-profits policies.

With-profits annuities

Policy duration

Policy description

Surrender value as at
1 March 2014

Surrender value a
year ago

Effective return over the year

5 years [1]

With Profits Pension Annuity

£4,007

£3,765

6.4%

10 years [2]

With Profits Pension Annuity

£4,577

£4,297

6.5%

Notes:
[1] With Profits Pension Annuity taken out on 01/02/2009 with an initial income of £3,000 and an Assumed Bonus Rate of 3%.
[2] With Profits Pension Annuity taken out on 01/02/2004 with an initial income of £3,000 and an Assumed Bonus Rate of 3%.
Total annual income includes any top-up bonus

2. ANNUAL BONUS RATES

Product

Bonus rate 2013 **

Bonus rate 2012

With Profits Pension Annuity– Series 1 & 2

1.90%

1.30%

With Profits Pension Annuity– Series 3 & 4
(entry years 2007-2011)

1.90%

1.40%

Pension Income Plus Annuity *

4.00%

2.25%

Tax Free Savings Plan

1.75%

1.75%

With Profits Growth Bond, With Profits Investment Bond,
Bank of Ireland Group / Liverpool Victoria With Profits Bond, MAX

1.00%

1.00%

With Profits Retirement Plan, Top Up Company Pension Plan,
Flexible Personal Pension Plan

1.50%

1.50%

With Profits Life ISA

0.50%

0.50%

Flexible Savings Plan – Series 2 *, Flexible Savings Plan – Series 1,
Regular Savings Plan, Mutual Investment Bond, Flexible Investment Bond,
Family & Legacy Fund, Mortgage Savings Plan

1.50%

1.50%

With Profits Income Bond

3.00%

3.00%

Flexible Whole Life Plan

6.17%

5.54%

Appropriate Personal Pension policies

1.81%

1.81%

Industrial Branch Life policies

1.00%

1.00%

Ordinary Branch Life policies

2.00%

2.00%

Ordinary Branch Pension policies

0.00%

0.00%

* Products open to new business.
** The 2013 annual bonus rates are effective from 01/03/2014, except for With Profits Pension Annuity policies where the rates are effective from 01/02/2014. The rate for Pension Income Plus Annuity is the Declared Investment Return for policies taken out with first anniversary dates between 01/02/2012 and 30/04/2012.Quarterly declarations are made for this product.

Further details of how LV= manages its with-profits business can be found in its Principles and Practices of Financial Management. The current version is on our website at http://www.lv.com/wp-info.

It is important to remember that past performance is not a guarantee of future returns as these depend on bonuses yet to be declared.

Mutual Bonus

LV=’s mutual bonus was launched in 2011 and rewards eligible members for their ownership of the Society. The LV= Board considers the financial performance of LV=’s trading businesses each year along with its current and projected financial strength to determine whether, at what level, and in what form, any mutual bonus should be declared, and which members should be eligible to receive it. Most eligible members will receive the mutual bonus when their with-profits policy matures or is cashed in. LV='s mutual bonus is not a guaranteed benefit and is at the discretion of the LV= Board.

About LV=

LV= employs over 5800 people and serves over 5.5 million customers with a range of financial products. We are the UK’s largest friendly society and a leading financial mutual.

When we started in 1843 our goal was to give financial security to more than just a privileged few and for many decades we were most commonly associated with providing a method of saving to people of modest means. Today we follow a similar purpose, helping people to protect and provide for the things they love, although on a much larger scale and through a wide range of financial services including insurance, investment and retirement products.

We offer our services direct to consumers, as well as through IFAs and brokers, and through strategic partnerships with organisations such as ASDA, Nationwide Building Society and a range of trades unions.