Friends Provident cuts bonus rates in UK

Friends Provident today became the latest UK life insurance company to cut its bonus rates after seeing falling stock markets slash investment returns in 2002.

The company, which demutualised and floated in 2001, also warned that unless there was a strong recovery in equity markets, further reductions in bonus rates were likely.

The next formal review is due later this year.

In a statement, Friends Provident said: “The fall in investment markets over the last three years has impacted the returns for all of our savings customers, not least for with-profits policyholders whose policies share in the investment profits and losses of the with-profits fund.”