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Mutual bonus scheme

Rewarding our members

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Rewarding our members

LV= is a mutual insurer which means we're owned by our 1.1m members. The LV= mutual bonus was introduced in 2011 and rewards eligible members for their continued investment in the Society. The LV= board considers the financial performance of the LV= trading businesses each year along with its current and projected financial and capital 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. The LV= mutual bonus is not a guaranteed benefit and is at the sole discretion of the LV= board.

2016 mutual bonus £17 million

Our performance in 2016 has enabled us to allocate a discretionary mutual bonus of £17 million (2015: £27 million). We have applied the mutual bonus by enhancing the asset share of relevant policies. The 0.5% enhancement to eligible policies’ asset shares has been reduced (2015: 1%) to reflect our lower operating profit and reduced capital strength.

Since the launch of the mutual bonus in 2011, LV= has allocated a total mutual bonus of £130 million to eligible member policies.

Our fifth mutual bonus declaration of £17 million was based on the financial performance of the LV= group for 2016. As a result policyholders benefit from a further 0.5% mutual bonus uplift within their with-profits payouts.

It will typically add £50 to an eligible with-profits policy currently worth £10,000 and will ordinarily form part of the amount payable when the policy matures or is cashed in (eligible annuitants will receive an increase in their income). It will be on top of the existing regular and final bonuses which our with-profits members already receive.

Here is a summary of our mutual bonus declarations.

Mutual bonus declaration

Uplift to payouts



















Currently the mutual bonus is used to increase the value of with-profits policies that are invested in the LVFS with-profits fund, except for Flexible Guarantee Bond 3 and Flexible Guarantee Funds 2 where the mutual bonus declared is expected to be zero. However this does not mean that these plans will never receive a mutual bonus.

The funds from policies that we acquired from the Royal National Pension Fund for Nurses (RNPFN) in 2001 or Teachers Assurance in 2016 are not invested in the LVFS with-profits fund, so these members are not included in the mutual bonus scheme.