Scottish Widows insurance maintains bonuses

With-profits policyholders at Scottish Widows have had their bonus rates maintained for the first time in several years.

Following poor stock market performance between 2000 and 2003, the 1.2 million policy-holders had to endure three years of bonus cuts, the Financial Times reports.

However, the with-profits fund performed well during 2004, finishing at a value of £18.1 billion, thereby allowing the bonus cutting trend to be halted.

"Our with-profits fund earned 10.5 per cent in 2004 and the benefits of this are being passed on to policyholders through our bonuses," Scottish Widows, the life assurance arm of Lloyds TSB, said in a statement.

However, the maturity value of an average endowment will still be lower than at this time last year due to it being invested over a different period.