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With profits investment bond survey shows Wesleyan continues to perform strongly

With profits investment bond survey shows Wesleyan continues to perform strongly

Wesleyan's with profits fund has once again performed better than the industry average in the annual Money Management With Profits Bonds survey (subscription required).

The survey looked at the actual 'cash in' value for a £10,000 initial investment over one to ten years. A ten year investment in Wesleyan's capital investment bond in the with profits fund would have increased in value by 71% compared to 54% of the average with profits bond*.

The actual 'cash in value' over seven and ten years were among the top three out of all the providers, once again reaffirming that with profits investments are for the medium to long term. Wesleyan's new business figures were also the third highest out of all the providers surveyed.

The Money Management article accompanying the survey says the low interest rate environment and the pension freedoms have created a large number of potential new customers. The ability to take five per cent of the original capital from an investment bond tax deferred each year is also a popular attraction. The allowance, which rolls over if it is not used, is particularly advantageous for customers who are higher rate tax payers at the time of their original investment, but are basic rate payers at the time of their withdrawal.

The survey also looked at how providers adjust bonuses on with profits products depending on market conditions, with suggestions providers have been showing more caution due to various events and announcements.

In the January edition of Money Management, Martin Lawrence, Wesleyan Investment Manager and Head of Research, said: "The situation has moved on since the Bank of England's interest rate cut in August 2016, and inflation expectations have subsequently risen, driven by rising oil prices and the depreciation of sterling against other major currencies.

"Ultimately, though, bonus decisions are derived from an actuarial process, which is based on factors such as underlying investment returns achieved and the outlook for investment markets."

The article concluded: "Despite taking a sustained reputational battering over recent years, with profits bonds have maintained a degree of popularity. Although clearly not the preferred solution for the majority of investors and advisers, many still see them as having a role to play."

* Results taken from Money Management magazine study published 01.01.2017 featuring the Wesleyan Capital Investment Bond invested in the with profits fund. Results tracked actual cash in values as at 1 November 2016 for a male at exact age 50 on encashment for a £10,000 lump sum with profits bond.

To note: The actual asset allocation as at the 1 November 2016 of the Wesleyan Capital Investment Bond is: Equities, 61% (UK, 51%; Overseas 10%); Fixed Interest, 14%; Property, 7%; Cash, 11%; Other, 7%)


Please note past performance is not a reliable guide to future performance and the value of your investment can go down as well as up, so you could get back less than you have invested.

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'WESLEYAN’ is a trading name of the Wesleyan Group of companies.

Wesleyan Assurance Society and Wesleyan Bank Ltd are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Wesleyan Financial Services Ltd, Wesleyan Unit Trust Managers Ltd, Syscap Ltd, Practice Plan Ltd and DPAS Ltd are authorised and regulated by the Financial Conduct Authority.  Advice about investments, insurance and mortgages is provided by Wesleyan Financial Services Ltd.

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