Standard Life reduces bonus payouts

Europe's largest mutual life insurer Standard Life has announced reductions in pay-outs on its with profit policies. Payouts on policies will fall by 7% on average.

Standard Life blamed the reductions on falling returns on all types of long-term investments over recent years.

Bonuses are also being cut by 0.25% to 1% in line, the company says, with lower inflation and interest rates

The company's Irish chief executive Rory O'Riordan said it remained committed to with profits products, and believed they were still an attractive long-term investment. The return on the Irish with profits fund over 2003 was more than 13%.

This is the fifth time in two years that Standard Life has made cuts and follows an announcement two weeks ago that the insurer is considering a stock market flotation.