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Financial strength and high equity holdings benefit Wesleyan’s With Profits policyholders

Wesleyan, the specialist financial mutual for professionals, today announced a review of its with profits bonus rates, effective from 2 April 2015. Key points include:

  • A £10,000 Wesleyan with profits bond purchased 10 years ago is now worth £20,650 giving an annual return of 7.5%, compared to an average building society account return of 2.1%
  • Payouts on 25 year endowments are 32% better than average
  • Cumulative investment return of 110.3% on the main with profits fund over 10 years
  • All annual bonus rates maintained
  • Mortgage endowment guarantee on Open Fund policies
  • Wesleyan rated 10/10 for ten successive years in the independent Cazalet report.

Tim Pindar, Wesleyan's Chief Actuary, said: "Our customers continue to benefit from investing in Wesleyan's strong and well managed with profits fund. Our financial strength means we are able to hold a high percentage of equities within the fund, currently 62%. We believe that this strategy offers the best potential for providing customers with continuing market leading payouts over the long term."

Wesleyan Chief Executive, Craig Errington added: "With interest rates remaining at an all time low, people need to think carefully about where they invest their money. With profits policies offer customers with a moderate risk profile the opportunity to invest in equities and therefore the potential for higher returns over the long term. The process of smoothing returns means investors have some protection from market volatility and returns are balanced out in good and bad years.

"Our customers have the added advantage of knowing that their money is placed with a financially strong, well managed mutual and we put their interests at the heart of what we do."

Independent industry analyst Cazalet Consulting has once again rated Wesleyan's with profits fund a 10/10, making it the only life office to receive this rating for ten successive years. In its 2014 With Profits Ratings Report on Wesleyan, Cazalet commented: "Wesleyan's considerable financial strength, combined with an unflashy approach to asset management underpinned by a stable asset mix, has helped the Society deliver consistently excellent medium to longer term investment returns on its with profits portfolio."


The table below is based on a 25-year term endowment policy for a male aged 30 next birthday at outset, paying £50 per month.

 Company 2015
 Wesleyan £43,181
 LV=  £39,010
 Friends FLC  £36,035
 Prudential  £31,296*
 Friends Provident  £29,682
 Legal & General  £28,539*
 Aviva Main Fund  £26,778
 Standard Life  £26,891
 Average payout £32,676

* Mortgage Endowment Policy
Source: Society Own Research

Investment Return

Wesleyan's investment return for With Profits policyholders continues to compare favourably against industry indices as shown in the table below.

Investment Return
 5 years10 years
Wesleyan With Profits Fund (Gross & cumulative return) 53.0% 110.3%
FTSE All-Share Index
(Total return)
 51.8%  107.6%
FTSE 100 Index
(Total return)
 44.8%  96.1%
ABI UK - Mixed Investment 40-85% Shares Managed-Pension  41.3%  73.4%
 ABI UK - Mixed Investment 20-60% Shares Managed-Pension  33.5%  51.8%

Source: Financial Express (Dec 2014)

Mix of assets backing our With Profits policies*

 Investment type % of fund at end of 2014 % of fund at end of 2013
 UK Shares  54  59
 Non-UK Shares  8  6
 Property  7  7
 Fixed Interest  16  11
 Other  15  17

Please note a slightly different mix applies to the MSS Fund.

At 31/12/14 the equity backing ratio (EBR) was 69%.

With Profits Fund Investment Performance

As the table below shows, the Fund has achieved a cumulative investment return of 110% over ten years.

With Profits Fund Investment Performance*

 2010 2011 2012 2013 2014 2010-14 2005-14
 +12.7%  -0.3%  +11.0%  +15.7%  +6.0%  +53.0%  +110.3%
*Invested assets backing with profits policies, subsidiaries included. Please note slightly different investment returns apply for the MSS Fund.

Financial Strength
  • Wesleyan has received a 10/10 rating for ten successive years in the Cazalet Consulting With Profits rating report, the only life office to achieve this.

Wesleyan's long term investment performance has enabled the Society to provide policyholders with strong annualised returns compared to other types of investment options.

Single Premium Bonds

 Investment ProductTotal PayoutAnnualised Return
Capital Investment Bond*
(10 year, £10,000 single premium)
  £20,650  7.5%
Average managed fund   £17,339  5.7%
Average building society account   £12,317  2.1%
Retail price inflation       n/a  3.2%

*Capital Investment Bond payouts are as at 1 April 2015.
NB. The Capital Investment Bond return includes product and fund charges compared to the average managed fund return which includes fund charges only.  The average managed fund figure is based on ABI UK Mixed Investment 40-85% Shares Managed - Life payout, for period ending 28.02.15.

The building society figures are based on an average 90-day notice account with a single initial investment of  £10,000 and are net of basic rate tax for a 10 year period respectively ending 28.02.15.

Source: Financial Express

Personal Pensions

 Investment ProductTotal PayoutAnnualised Return
Open Fund Personal Pension
(20 year term, £200 per month regular premiums)
  £100,909  6.9%
MSS Fund Personal Pension
(20 year term, £200 per month regular premiums)
  £116,747  8.2%
Average managed fund   £89,387  5.8%
Retail price inflation       n/a  3.1%

The average managed fund figure is based on ABI UK Mixed Investment 40-85% Shares Managed - Pension payout, for period ending 28.02.15.
Source: Financial Express

Investment ProductTotal PayoutAnnualised Return
Open Fund Savings Endowment
(25 year term, £50 per month
regular premiums)
  £43,180  7.6%
Open Fund Mortgage Endowment
(25 year term, £50 per month
regular premiums)
  £41,514  7.4%
MSS Fund Savings Endowment
(25 year term, £50 per month
regular premiums)
 £51,996  8.8%
Retail price inflation     n/a  3.0%

Except where stated, figures apply to the Wesleyan Open Fund. There is also a closed fund called the Medical Sickness Society (MSS) Fund, which contains the With Profits business of Medical Sickness Society before the merger with Wesleyan in 1997.

Please note all payouts are as at 1 May 2015 unless specified otherwise.

Annual Bonus Rates

All of the rates below are quoted gross of annual management charge. For some policy types the bonus rate is applied net of annual management charge.

Unitised With Profits policies

  2014 2013
 Life and investment products 3.00% 3.00%
 Series 1 Pension products 4.25% 4.25%
 Other Pension products 3.50% 3.50%
 ISA products 3.50% 3.50%

Conventional With Profits policies:

The bonus rates for the main classes of conventional policy are shown below.

Conventional With Profits Policies
 Bonus on sum assured /
attaching bonus (%)
Bonus on sum assured /
attaching bonus (%)
        2014                2013
 Open Fund  
 Life    1.75 / 2.50             1.75 / 2.50
 Pensions    0.30 / 0.50             0.30 / 0.50
 MSS Fund  
 Life    1.75 / 4.25             1.50 / 4.00
 (Cash Contracts)
   1.25 / 1.25             1.25 / 1.25

Capital Investment Bond payouts change daily. Other payouts in the Open Fund changed from January 2015 and will change again from May 2015. In the MSS Fund payouts changed from October 2014 and will change again from April 2015.

Future bonus rates are not guaranteed and may vary, as they depend on profits yet to be earned. The illustrative maturity amounts include periods of high inflation and high investment returns. A market value reduction on encashment (except on maturity or death) can be applied which will reduce the payout on With Profits investments.

Full written terms and conditions of Wesleyan products are available on request. All charging structures are applied to the product at the time the policy was taken out. Past performance is no guarantee of future performance and some values have been achieved during a period of high investment returns and interest rates.

'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, 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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© 2018 Wesleyan Assurance Society