• Estate distribution continues to uplift maturity values on most of our funds.
• Estate distributions have increased for the majority of funds which enables an increase in final bonus rates.
• Annual bonuses provide an additional level of guarantee for our policyholders as once added they cannot be taken away.
• Annual bonus rates remain largely unchanged, with over 75% of our policies receiving them.
• Many customers continue to benefit from the guarantees that apply under their policies.

Here’s what this could mean for policies

We've provided some examples of what this could mean for policies. Of course, it's important to remember that these examples are purely for illustration. Everyone's circumstances are different. There are a number of factors that affect the value of the with-profits investment, including the age of the policyholder, when the investment started, and how much has been paid in.

The following table shows the payouts from our with-profits funds which have 25 year term conventional savings endowment maturing in 2020. We have assumed these were taken out on 1 January 1995 for a male policyholder aged 30 at the start of the policy paying £50 a month.

*PLAL Phoenix Life Assurance Limited
**PLL Phoenix Life Limited

The funds shown are our six largest (by asset share) which have 25 year term
conventional savings endowment maturing in 2020.

Distribution of excess assets (estate distribution)

As a closed fund provider, many of our with-profits funds currently have more money in the fund than we expect to pay out in claims. Some of this surplus is used to protect the fund against unexpected shocks, for example a fall in the value of the fund's investments. However the remainder can be released and used to increase the amount we payout to policyholders. For example, in the PLL SPI With-Profits Fund this surplus is increasing policy payouts by up to 40.8% for those policies receiving a final bonus from January 2020. The following table shows the estate distribution increase to policy payouts for some of our other with-profits funds from January 2020.

The funds shown are our six largest (by asset share) that are currently distributing
estate.

Annual bonus rates and guarantees

Conventional policies have the following guarantees:

This guaranteed minimum amount is increased by the annual bonuses which we
have added over the lifetime of the policy, once added annual bonuses cannot
be taken away.

These are the annual bonus rates larger policy classes⁺ for endowments and whole of life policies:

+These represent the largest groups by number of policies, other rates may apply for
smaller policy classes.

These are the annual bonus rates for larger policy classes⁺ for conventional pension policies:

+ These represent the largest groups by number of policies, other rates may apply for
smaller policy classes.

Unitised policies also have valuable guarantees.

Premiums are used to buy with-profits units in the fund. For most funds the guaranteed benefits payable at the maturity date/selected retirement date / other guarantee date are the value at that time of the units purchased under the policy, including any growth in the value of units through the addition of annual bonus.

These are the annual bonus rates for our larger policy classes⁺ for unitised life policies*:

+ These represent the largest groups by number of policies, other rates may apply for
smaller policy classes. *Bonus rates on most unitised with-profits policies may be
changed at any time.

And for our larger policy classes⁺ for unitised pension policies*:

+ These represent the largest groups by number of policies, other rates may apply for
smaller policy classes.

*Bonus rates on most unitised with-profits policies may be changed at any time

**Guaranteed minimum rate.