Aviva with-profits investors lose out on bigger bonuses

AVIVA is to keep bonus payouts to most of its 2.1 million with-profits policyholders on hold despite a recovery in fund values last year.

Regular bonus rates on unitised life and pensions with-profits policies taken out since 2003 will remain at 2.75 and 3.25 per cent respectively. But some bonuses paid to investors in conventional life and pensions policies will be cut.

Penalties levied on policyholders leaving the fund prematurely – market value reductions – have been trimmed from an average of 10 per cent to 8 per cent.

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Aviva's main with-profits fund grew 6 per cent last year, compared with a 13.7 per cent slump in 2008. But Laith Khalaf, pensions analyst at Hargreaves Lansdown, said: "In a year when the sun was shining on the UK stock market Aviva has failed to make much hay for its with-profits investors."