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Aviva holds business bonus rates.

INSURANCE giant Aviva announced that it has frozen or cut annual bonus rates for its 1.5 million with-profits investors.

The group said annual bonus rates for new business are being held at 2.5% for bonds, 3% for pensions and 2.75% for stakeholder pensions. Annual bonus rates also remain the same for most unitised life and pension business.

However, for the 27,000 savers in ex-Commercial Union bonds, bonuses have been cut from 2.5% to 2%, while the 24,000 savers in ex-Norwich Union bonds without a guaranteed bonus have seen a drop from 1% to 0.75%.

Aviva said a bond invested a decade ago will have outperformed an average savings account. It said a PS10,000 with-profits bond purchased 10 years ago is now worth PS17,082, while the same amount of money invested in a typical savings account would have grown to PS12,228.

It said investment markets have remained "volatile" and the challenging economic backdrop has highlighted the value of the "prudent approach" it has taken to managing with-profits funds.
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Title Annotation:Business
Publication:Western Mail (Cardiff, Wales)
Date:Feb 13, 2013
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