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Wesleyan continues to deliver strong long term payouts to policyholders

Wesleyan, the specialist financial mutual for doctors, dentists, lawyers and teachers, today announces a review of its with profits bonus rates, effective from 3 April 2017. Key points include:

  • Cumulative investment return of 79.3% on the main with profits fund over 10 years
  • A £10,000 Wesleyan with profits bond purchased 10 years ago is now worth £17,056 giving an annual return of 5.5%, compared to an average 90-day notice account return of 1.8%
  • Mortgage endowment guarantee on Open Fund policies


Tim Pindar, Wesleyan's Chief Actuary, said: "Wesleyan's with profits policies regularly feature among the very best in industry tables for long term performance*. One of the clear benefits of our financial strength is the ability to retain a high proportion of equities in our with profits fund. This means that we can deliver strong payouts to policyholders over the medium- to 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 willing to take a moderate risk with their money, the opportunity to invest in equities and therefore the potential for higher returns over the long term.

"Our customers have the added advantage of knowing that their money is placed with a financially strong, well managed mutual with an absolute focus on providing them with the best long term results."


* Money Management magazine study published 01.01.2017 featuring the Wesleyan Capital Investment Bond. Results tracked actual cash in values as at 1 November 2016 for a £10,000 lump sum with-profits bond.

Payouts

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.

Payouts
 Company 
 Wesleyan £37,613
 
 Aviva Main Fund  £27,670
 Friends FLC  £34,408
 Friends Provident  £29,235
 Legal and General  £26,408*
 Prudential £29,268*
 Scottish Amicable £29,865*
 Scottish Widows £25,071*
 Standard Life £24,929
 Average payout £29,385

* Mortgage Endowment Policy
Source: Society Own Research. Average payout calculated from available data of comparable companies.

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)* 61.2% 79.3%
FTSE All-Share Index
(Total return)
 61.8%  71.8%
FTSE 100 Index
(Total return)
 54.4%  66.7%
ABI UK - Mixed Investment 40-85% Shares Managed-Pension  53.0%  64.0%
 ABI UK - Mixed Investment 20-60% Shares Managed-Pension  40.0%  50.6%

Source: Financial Express (Dec 2016)
* The performance figures shown above are based on the gross return on the underlying assets of the With Profits Fund before charges are deducted and do not include the effects of smoothing. The return individual investors have received on their own investments will be different due to, for example, the amount invested, smoothing and charges.

Mix of assets backing our With Profits policies*

 Investment type % of fund at end of 2016 % of fund at end of 2015
 UK Shares  49  52
 Non-UK Shares  10  9
 Property  8  9
 Fixed Interest  15  13
 Other  18  17

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

At 31/12/16 the equity backing ratio (EBR) was 67%.

With Profits Fund Investment Performance

As the table below shows, the Fund has achieved a cumulative investment return in excess of 79% over ten years.

With Profits Fund Investment Performance*

 2012 2013 2014 2015 2016 2012-16 2007-16
 +11.0%  +15.7%  +6.0%  +2.3%  +15.75%  +61.2%  +79.3%

*Invested assets backing with profits policies, subsidiaries included. Please note slightly different investment returns apply for the MSS Fund.
(Source: Internal actual returns correct at 31/12/16. The performance figures shown above are based on the gross return on the underlying assets of the With Profits Fund before charges are deducted and do not include the effects of smoothing. The return individual investors have received on their own investments will be different due to, for example, the amount invested, smoothing and charges.

Payouts

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)
  £17,056  5.5%
Average managed fund   £17,086  5.5%
Average building society account   £10,885 0.85%
Retail price inflation       n/a  2.82%

*Capital Investment Bond payouts are as at 1 April 2017.
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 28.02.17.

The 90-day notice account figure is based on a Moneyfacts average with a single initial investment of  £10,000 and are net of basic rate tax for a 10 year period respectively ending 28.02.17.

Source: Financial Express
 

Personal Pensions

 Investment ProductTotal PayoutAnnualised Return
Open Fund Personal Pension
(25 year term, £200 per month regular premiums by a male aged 30 at outset)
  £165,682  7.1%
MSS Fund Personal Pension
(25 year term, £200 per month regular premiums by a male aged 30 at outset)
  £209,294  8.9%
Average managed fund (25 year term, £200 gross per month regular premiums by a male aged 30 at outset)   £139,788  6.02%
Retail price inflation       n/a  2.82%

The average managed fund figure is based on ABI UK Mixed Investment 40-85% Shares Managed - Pension payout, for period ending 28.02.17. RPI annualised from 28/02/07 to 28/02/17
Source: Financial Express
 
Endowments

Endowments
Investment ProductTotal PayoutAnnualised Return
Open Fund Savings Endowment
(25 year term, £50 per month
regular premiums)
  £37,613  6.7%
Open Fund Mortgage Endowment
(25 year term, £50 per month
regular premiums)
  £37,613  6.7%
MSS Fund Savings Endowment
(25 year term, £50 per month
regular premiums)
 £49,998  8.6%
Retail price inflation     n/a  2.82%

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 July 2017 unless specified otherwise. RPI annualised from 28/02/07 to 28/02/17.

ANNUAL BONUS RATES

Unitised with profits policies
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

  2016 2015
 Life and investment products 2.50% 2.50%
 Series 1 Pension products 3.75% 3.75%
 Other Pension products 3.00% 3.00%
 ISA products 3.00% 3.00%

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 (%)
        2016                2015
 Open Fund  
 Life    1.25 / 2.00             1.25 / 2.00
 Pensions    0.20 / 0.40             0.20 / 0.40
 MSS Fund  
 Life    1.75 / 4.25             1.75 / 4.25
 Pensions
 (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 2017 and will change again from May 2017. In the MSS Fund payouts changed from October 2016 and will change again from April 2017.

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.
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.

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.
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