They must be as I've just received a statement on my "With Profits" holding from them showing a 1.5% increase between 6 July 2005 and
2006.
Now let's compare that with my Weslyan "with profits" holding for the same period which rose a very creditable 21.3% in the same period.
Now the main reason I went with these companies was because they are mutual and I figured there's a chance (maybe snowball's chance) of a demutalisation windfall.
I'm not sure if you're comparing apples with pears there Jim.
I've no experience of Weslyan, but would be extremely surprised if they declared a 21.3% bonus rate, they simply wouldn't in the current climate. I can only assume that if you are reading this from their literature that you are looking at what the underlying fund returned, not what is actually being distributed. You may possibly be looking at the effects of market value adjustments coming down.
The 1.5% that Liverpool Victoria paid is pretty run of the mill for with profits funds at the moment, and more than a lot of companies are paying. This is a reflection on the fund, the not company.
Beg to differ Matt. Straight from my Wesleyan (Stakeholder With Profits) statement: value 5 Apr 2006, vs 6 Apr 2005. The increase is 21.8% !!!! And of course the accompanying letter was singing their own praises about their wonderful performance. Fair enough
So well done Wesleyan; Liverpool Victoria definately suck.
Something strange here.. Wesleyans Bonus rate for 2005 was largely unchanged. Their literature shows that the value of the w/profits fund rose 21.3% which is remarkably similar to the figure you quoted in your original post but, of course, this is NOT the bonus rate.
If the value of your fund has changed by that amount then there must be some other variable that has changed between the two fund values (i.e. contributions, or a removal of MVA etc.,) that you have not mentioned.
I'm sorry fella, but unless you've paid a significant amount into the fund into it, 'your' fund value has not increased by 21.8% over the last year, it's just not going to happen in the current climate, if ever.
Again, it's apples and pears, I'm not 100% sure what you're looking it, but it's not like for like and I'd be surprised it the actual value of the Wesleyan fund had increase by much more than 1.5% over the last 12 months. Maybe you are reading the underlying fund growth, very little of this would have been passed on to investors. When you've got the correct figures, I suspect your initial reaction would be that they both 'suck'.
I started this thread decrying LV's pitiful performance, but it seems to have morphed into proving Wesleyan's stellar performance !
Checking my records: I threw £3600 (£2808 cash) into Wesleyan's Stakeholder Plan in Feb
2004.
Latest Statement says: Policy value at 6 April 2005 3985.50 Policy value at 5 April 2006 4854.59
Now for a little bit of humble pie on my part (only a little). A closer look reveals the Wesleyan contribution was into the "managed fund". But before you say "yeah, yeah, yeah.", the letter accompanying my statement clearly states: "Wesleyan has maintained a major commitment to equities (ie company shares) and property for many years and the level of equities in the With Profits fund is significantly above the industry average. This was again a major contributor to an excellent investment return of
21.3% (before tax) on the WITH PROFITS FUND in 2005."
[That is the statement that led me to my posting. I now get the the feeling you are going to say: "OK their investments returned 21.3%, but probably not all was passed on." I don't know, but one would expect a heck of a lot more than 1.5%]
So, is it lies, damned lies and statistics ?.
Even with the government mandated "safer" investments of With Profits funds, 1.5% is a pitiful joke. Further shouldn't it have been "smoothed" much higher. Better than spending it on cricket sponsorship!
Maybe someone knows the actual amount Westeyan passed on in bonuses on WP.
I'm not ready to retract my statement about LV's WP performance.
But this is a 'With profits' fund and the 'fund growth' and the 'annual bonus' are quite different things (and in any event only 72% of the fund is in equities.)
No, it should be three whole pies at least. That was a crucial error, which is way we didnt believe you.
None, you just got confused.
That was a HUGE mistake to make.
No, the links I pasted into my reply to Daytona should help you with the concept of 'With Profits'.
For pensions : Traditional With profits = 0.3% bonus (yes, that is POINT THREE OF ONE PERCENT). (and that is the sum assured, not the fund value) and for Unitised With profits : 4%..(before the application of their management charge!) Some of their classes of their with profits business had a NIL bonus.
Their mainstream business bonus rate was just 1%.
Despite their Bonus for pensions being 3%?
So let me get this right, despite seeing that you are comparing the performance of a horse with that of Toothpaste, and despite not knowing what Wesleyans actual bonus was, and without knowing what Liverpool Victoria's was, this is a remarkable assertion.
Finally, if you want to compare managed funds over one year then Wesleyans Managed Fund did 13.24% in the year to 1/6/06 whilst Liverpool Victoria's did 17.51%.
It doesn't explain why 1.5% is considered reasonable. This given the long run equity growth of 8%. Does the annual bonus get stuffed in gilts or something ?
Can I preface my reply by saying I HATE With Profits, and have been saying so for as long as I have been posting to this group, so these are just facts and not me trying to justify them.
If you read the links I gave one of them gives a reasonable explanation of how With profits funds 'smooth' returns over many years. So whilst you say 'a long run of equity growth' it isnt all that long and it came after a longer run of falls.
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