M&G plc has announced today that its subsidiary, the Prudential Assurance Company’s £129 billion With-Profits Fund1 is set to share approximately £2.3 billion in bonuses with around two million traditional with-profits customers through its annual bonus declaration.
The Fund is the largest of its kind in the UK and through its ability to invest in a wide range of assets across regions and both public and private markets, it has once again benefitted customers in an environment where many markets saw growth despite uncertain economic conditions. The main asset pool within the Fund returned 7.3% over the 12 months to the end of 20242. As a result of the declaration, customers will typically see the year-on-year value of their plan increase by between 4.0%-8.0%.
M&G explains what the bonus payments mean for different types of With-Profits customers3
- A single premium of £10,000 invested in our With-Profits Bond (Flexible Investment Plan) in 2015 will be worth £15,834 in 2025, of which £11,754 is made up of the initial investment plus Regular Bonuses and a £4,080 Final Bonus. This represents an annualised return over the 10-year policy term of 4.7%.
- A customer who has contributed £200 (gross) a month for 10 years into a personal pension invested in our With-Profits Fund (£24,000 in total) and is retiring on 1 May 2025, will have a fund value of £31,334, of which £26,418 is made up of premiums paid plus Regular Bonuses and a £4,926 Final Bonus representing an annualised return of 5.2%.
A decade of strong performance
In the ten years to the end of 2024, the Fund produced a cumulative gross return of 78.0%4. This compares with a 37.0% return from the ‘ABI UK – Mixed Investment 20% – 60% Shares Sector Average – Pension Funds’5 over the same period, demonstrating the long-term benefits of investing in our financially-strong and well-diversified With-Profits Fund.
“Due to the scale and strength of our With-Profits Fund, of which over £62 billion6 is our PruFund fund range, we are able to invest across asset classes, including private markets, whilst using the bonus process to smooth some of the short-term highs and lows of investment performance. We see compelling opportunities in differentiating private strategies – in value-add and alternative real estate investment, along with direct lending in both the sponsored and the non-sponsored space – that will enhance our private assets portfolio.”
Funding the real economy and increasing exposure to global growth opportunities
The Fund invests in a globally-diversified portfolio ofassets7 and has a heritage in supporting the real economy through infrastructure and real estate investment. During 2024, the Fund benefitted by accessing the investment capabilities of M&G plc’s active asset management business to:
- develop 40 Leadenhall, the largest office block to complete in the City of London in 2024, which has welcomed its first tenants. Working with M&G Real Estate, 40 Leadenhall exemplifies the Fund’s global real estate strategy of having state-of-the art office buildings in desirable locations to attract blue-chip companies and meet their occupational needs.
- seek higher returning opportunities for its wider £13 billion global real estate allocation. M&G Investments acquired a majority stake in a leading UK and European value add real estate investment manager, Baumont, with the Fund subsequently investing €200 million into their latest strategy.
- steadily increase its exposure to publicly listed companies in the Asia Pacific region over the past five years by utilising the capabilities of the equity investment team that joined M&G Investments in 2019. Public equity exposures to the region are largely in Japan, China and India, and during 2024, the Fund increased its exposure to Japanese small-cap and Chinese equities.
The PruFund range of funds
Our market-leading PruFund fund range is also powered by our With-Profits Fund. Within this fund range, the PruFund Growth Pension Fund returned 7.8%8 over 2024. This includes an annual management charge deduction of 0.76% and a share of some additional money that had built up in the Fund over many years, which we decided to share with all our eligible customers in 2024, and in this fund was reflected by increasing the unit prices by 0.9% (effective on 27 February 2024)9.
Notes:
1. The With-Profits Fund had total assets under management of £129 billion, as at 30 June 2024. The main asset pool, which is relevant to the largest book of with-profits customers within this Fund, had total assets under management of £93 billion.
2. Before tax, charges and the effects of smoothing.
3. Full details of the 2025 With-Profits Bonus Declaration, are available at https://www.pru.co.uk/existing-customers/bonus-declaration.
4. Before tax, charges and the effects of smoothing.
5. ‘ABI UK – Mixed Investment 20%-60% Shares Sector Average – Pension Funds’ – The Association of British Insurers has a classification system whereby the performance of similar investment-linked funds are grouped together to give an average performance figure. This is known as the sector average. It’s important to note that some, if not all, of the funds in this sector average will already have fund management charges deducted from their performance.
6. As at 30 June 2024.
7. The With-Profits Fund predominantly invests within public markets. Asset mix of the main asset pool within the Fund as at 31 December 2024:
| Asset | % |
| UK Equities (listed) | 10.1 |
| Overseas Equities (listed) | 26.9 |
| Real Estate | 13.2 |
| Alternative Assets | 15.0 |
| Fixed Interest | 29.8 |
| Cash & Receivables | 5.0 |
| Total | 100.0 |
- 8. PruFund Growth Pension Fund Retirement Account – Series E. As a pension fund there is no tax applied to the return.
9. Further details are available at: https://www.pru.co.uk/aboutadditionalmoney
