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Wesleyan With Profits Fund

Wesleyan With Profits policies are medium to long term investment products invested in the Wesleyan With Profits fund.

This page provides a high level overview of With Profits. For more detailed information please read the How With Profits Works guide that is relevant for your policy.

You can find information on our With Profits fund performance on our Fund Prices and Performance Centre where you can access the fund fact sheets, which include information such as historical performance and asset allocation.
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Please note that past performance is not a reliable guide to future performance. Remember the value of investments and any income can go down as well as up and you may get back less than you invest.

What is the With Profits Fund?

The Wesleyan With Profits fund is invested in a range of assets, including equities, property, fixed interest and cash. The return on these investments is one of the factors that affects the value of your with profits investment.

The fund's value will change based on the returns we make from our investments and other profits and losses from other areas of the business, including our subsidiary companies. You get your share of profits in the form of regular bonuses added to your policy, which once added are guaranteed (unless a Market Value Reduction (or MVR) is in place - see What are Final Bonuses for more information).

You may also be entitled to a final bonus. The value of any final bonus is based on our investment returns and the profits and losses we experience over the period of your investment.

It is also subject to the effects of smoothing and any MVR that may be in place at the time. You should refer to your terms and conditions and the relevant With Profits Guide for your policy for further details on this (see Market Value Reduction for more information).
Smoothing


One of the main aims of the With Profits Fund is to reduce the effect of short-term fluctuations on the value of your policy.

In order to achieve this, we don't pass on the full amount of the investment returns, and other profits and losses, as they arise. Instead, we apply any changes to the value of your investment over time, cushioning the impact in a process known as smoothing.

The diagram below demonstrates how smoothing works:

  • In periods of good investment returns, some of the returns may be retained within the fund
  • What we have kept back would then be gradually applied to your policy during periods of poor investment return to help cushion the fall in your share of the Fund


Smoothing With Profits

In the long term, we aim to pass on all of the investment returns, profits and losses from our business activities attributable to the With Profits Fund.

So, if investment returns remain high, then payouts are likely to be higher. Similarly, if investment returns remain low, then payouts are likely to be lower.

With Profits Regular Bonuses

In the long term, we aim to pass on all of the investment returns, profits and losses from our business activities attributable to the With Profits fund. So, if investment returns remain high, then payouts are likely to be higher. Similarly, if investment returns remain low. then payouts are likely to be lower.

With Profits Regular Bonuses

We usually add regular bonuses throughout the period of your investment. We will review the bonus rate that will apply to your type of policy annually. The method used to add this depends on the type of product you hold - please refer to the relevant guide for further information on this.

We don't promise to add any regular bonuses, however once we add a regular bonus it is guaranteed (subject to any MVRs in place).

You can keep track of the regular bonuses that have already been added. We send you an annual statement, which gives you the current value.

Annual Bonus Rates for Unitised With Profits policies

 Year  2017  2016  2015  2014  2013
 Life Fund  2.00%  2.50%  2.50%  3.00%  3.00%
 With Profits ISA  2.50%  3.00%  3.00%  3.50%  3.50%
 Pension Fund (Series 1)  3.25%  3.75%  3.75%  4.25%  4.25%
 Pension Fund (Series 2 & above)  2.50%  3.00%  3.00%  3.50%  3.50%


The annual bonus rates above are effective from 2 April the following year e.g. 2017 rates will be effective from 2 April 2018. The bonus rates are gross of annual management charges (AMC).

Annual Bonus Rates for Conventional With Profits policies (not available on new policies)

   2017  2016  2015  2014  2013
 Life Fund  1.00%  1.25%  1.25%  1.75%  1.75%
   (1.75%)  (2.00%)  (2.00%)  (2.50%)  (2.50%)
 Pension Fund  1.0%  0.20%  0.20%  0.30%  0.30%
   (0.20%)  (0.40%)  (0.40%)  (0.50%)  (0.50%)

The annual bonus rates above are effective from 2 April the following year e.g. 2017 rates will be effective from 2 April 2018.

We declare two annual bonus rates. One rate is a percentage of the sum assured, and the second rate (in brackets above) is a percentage of the annual bonus that the policy already has. For conventional policies we add the annual bonus to the sum assured and any existing bonuses where previously declared.

These bonus rates are specific to the conventional With Profits policies. Three parts make up these policies:

1. Sum assured - this is a value that the policy set up with and is guaranteed

2. Annual bonus - this is the bonus that gets added each year, it is based on the bonus rates declared. Once it has been added to the policy it is guaranteed

3. Final bonus - this is paid when the policy ends but it is not guaranteed

What are Final Bonuses


With Profits policies are designed to smooth out the highs and lows of the stock markets. As mentioned, this process involves holding back some of the investment returns in periods of growth.

Then, on maturity you may be entitled to a final bonus, depending on what policy you hold. The diagram here shows how your final bonus would be applied, based on the smoothed investment returns at maturity or when the policy is cashed in, if you are entitled to one.

With Profits Final Bonus Example












The final bonus can enhance the final investment sum that you receive significantly above the regular bonuses that are paid.

For further information on MVRs, please click read more on the link below.

More information

More information

For more detail than the information provided on this page, please refer to our guides on how With Profit Funds work.

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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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