M&g Plc · LSE:MNG
M&g — Corporate Update (February 2025)
74 slides from M&g's corporate update, February 2025
Slide 1: Bonus Declaration 2025
Bonus Declaration 2025 This is just for UK advisers – it’s not for use with clients.
Slide 2: Important information
Important information This presentation is for adviser use only and not for retail customers and contains some forward-thinking statements which should not be taken as fact. Information given is based on our current understanding of current taxation, legislation and HMRC practice, all of which are l
Slide 3: 2025 Bonus declaration overview
2025 Bonus declaration overview Paul Fidell
Slide 4: How have we done?
How have we done? • Over the year to 31/12/24, The Prudential Assurance Company Limited (PAC) With- Profits Fund returned 6.1% (net of tax) and 7.3% (gross of tax). These figures are before plan charges and the effects of smoothing • Each year, we base the rates we declare on historic fund performan
Slide 5: Economic background
Economic background 2024 was a year of positive performance and economic growth in an uncertain economic environment. Some key themes were: • Continually changing interest rate expectations. • Political uncertainty including the UK and US elections and ongoing military conflict in Ukraine and the Mi
Slide 6: Relative performance
Relative performance ABI Mixed Investment ABI UK Mixed Prudential With- Prudential With- 20 - 60 Shares Sector Investment 20 - 60 Profits Fund Gross Profits Fund Net Average – Pension Shares Sector Average Return* (%) Return** (%) Funds*** (%) – Life Funds*** (%) 1 yr. return 7.3% 6.1% 4.9% 3.8% Cum
Slide 7: Relative performance
Relative performance 1 yr. % 5 yr. ann % 10 yr. ann % 10.0 9.4 9.0 9.0 8.0 7.3 7.0 6.1 5.9 5.8 6.0 5.5 4.6 4.8 5.0 4.4 4.4 3.8 4.0 3.0 2.6 2.4 2.0 1.1 1.0 0.0 Prudential With-Profit Fund Gross IA Flexible Investment IA Mixed Investment 40-85 IA Mixed Investment 20-60 IA Mixed Investment 0-35 Source:
Slide 8: Relative performance
Relative performance 1 year 5 years 10 years 10% 4% 28% Rank 52/186 Rank 15/147 Rank 4/110 72% 90% 96% Higher than sector Lower than sector Higher than sector Lower than sector Higher than sector Lower than sector Source: Prudential calculations based on data from FE Analytics. Charts show how cumul
Slide 9: Historic annualised returns – 5 years
Historic annualised returns – 5 years 35.00% 30.00% 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% -5.00% -10.00% Source: Prudential. All figures to 31 December 2024. With-Profits performance is gross of tax, charges and the effects of smoothing. Blue line represents rolling 5-year return to 31st December
Slide 10: Financial strength – as at February 2025
Financial strength – as at February 2025 Standard & Poor’s AKG M&G (Prudential) A+ (stable) 5/5 Legal & General (1) AA- (stable) 4/5 (2) Aviva Life & Pensions UK Ltd AA- (stable) 5/5 (3) Phoenix Not rated 4/5 (4) Scottish Equitable (AEGON) A+ (stable) 4/5 Scottish Widows Ltd W/D (5) 4/5 (1) Transfer
Slide 11: T&IO Performance and Outlook
T&IO Performance and Outlook Parit Jakhria
Slide 12: SAA setting process at a glance
SAA setting process at a glance Translating quantitative and qualitative research into implementable portfolios 1. Capital Market Views and Thematic Research Capital Market Views ▪ Historical capital market returns and analysis ▪ Bespoke ex-ante research and modelling ▪ Market insight internal/exter
Slide 13: 2024 – Resilience amid uncertainty
2024 – Resilience amid uncertainty A solid year for capital markets Risk premia compression in 2024 UK 10-Year Treasury Yields; Source: Datastream Note for the right-hand chart: Red bars represent the level of valuations implied by current market pricing. Our valuation metrics differ by asset class:
Slide 14: Medium term themes
Medium term themes Global fiscal risks – on Role of Emerging markets in Trump 2.0: cultivate or borrowed time? multi-asset portfolios challenge US exceptionalism? Economies face growing fiscal burden Growth potential and diversification Geopolitical instability demands agility as global debt levels
Slide 15: Global fiscal risks: on borrowed time?
Global fiscal risks: on borrowed time? Global public debt exceeded $100 trillion in 2024 and is projected to reach 100% of global GDP by 2030, with US and China contributing significantly to the increase. Meanwhile, a steady acceptance of fiscal spending in political discourse has been documented an
Slide 16: Role of Emerging markets in multi-asset portfolios
Role of Emerging markets in multi-asset portfolios Emerging Markets, holding 85% of the global population, are expected to drive future population growth. Higher fertility rates and life expectancy improvements contribute to this growth, which positively impacts economic performance Market capitalis
Slide 17: Trump 2.0: cultivate or challenge US exceptionalism?
Trump 2.0: cultivate or challenge US exceptionalism? Whilst decoupling between US and China is more noticeable, signs of trade fragmentation has been surfacing between “blocks” defined by geopolitical ideologies. Trade between the US and China and with other partners Estimated GDP impact of bi-later
Slide 18: Risks and Opportunities: what to watch out for in 2025
Risks and Opportunities: what to watch out for in 2025 • Effect of US tariffs • China – what next? • Geopolitical risks – continue to be elevated • Geopolitical risks – the risk from the far-right in Europe • AI – will the AI wave finally broaden? • Climate risk – what next, will 1.5 be breached?
Slide 19: T&IO Investment implications
T&IO Investment implications
Slide 20: Key Investment implications
Key Investment implications With-profits SAA Peer group SAA Diversification Inflation not extinct remains key to – Real asset ensure robustness exposure valuable Orthogonal factors Fading to enhance fund competition from returns Cash As at Dec 2024. As at 30/09/2024. Source: 2024 Day 1 SAA, LTIS. So
Slide 21: With-profits main asset share fund Strategic Asset Allocation
With-profits main asset share fund (“OBMG”) Strategic Asset Allocation 2024 Strategic Asset Allocation (Risk reduction) OBMG SAA 2024 • The pie chart shows the 2024 SAA for the With-Profits main asset share fund. • The Q4 2023 SAA review (effective 1st Nov 2023) allowed for significant tightening ov
Slide 22: With-profits main asset share performance in a post COVID environment
With-profits main asset share performance in a post COVID environment The fund’s allocation and diversification played a critical role post-covid (Dec-2021 to Dec-2024) The graph illustrates the benefit of a diversified asset allocation in adverse market conditions. Equities (with the exception of C
Slide 23: 2025 Bonus declaration - product level returns
2025 Bonus declaration - product level returns Paul Fidell
Slide 24: How does all this translate for customer returns?
How does all this translate for customer returns? • In 2024 concerns over interest rate expectations continued as geopolitics and ongoing military conflict dominated the news. Overall, many markets saw growth in an unpredictable environment. • Our With-Profits customers have benefitted from investin
Slide 25: How does all this translate for customer returns?
How does all this translate for customer returns? So, we’re pleased that in 2025: • For all of our customers, we’re keeping Annual Bonus rates at the same level as last year, which will continue to add to the guaranteed benefits of our customers’ Plans. • Most of our customers will benefit from incr
Slide 26: 2025 Bonus declaration – onshore bonds
2025 Bonus declaration – onshore bonds
Slide 27: Regular Bonus rates
Regular Bonus rates Flexible Investment Plan Regular bonus rate % New money rate* % 2025 2024 2025 2024 Optimum Return Fund (Initial charge option) 2.25 2.25 5.00 5.05 Optimum Return Fund (No initial charge 2.25 2.25 4.70 4.75 option) Optimum Bonus Fund (Initial charge option) 2.75 2.75 4.60 4.80 Op
Slide 28: How does all this translate for customer returns?
How does all this translate for customer returns? 10 year Bond (Flexible Investment Plan – FIP) performance relative to Total Annualised alternative investment products (based on a single premium of £10,000) pay out return Prudential With-Profits Bond (FIP) £15,834 4.7% Average mixed investment 20-6
Slide 29: Year on year changes – Bonds (FIP)
Year on year changes – Bonds (FIP) Typical increases in plan values over previous 12 months based on a single premium of £10,000 Year on year increase in value(1) Plan taken out in Duration Value in 2025 Value in 2024 return over £ the year % 2020 5 £12,844 £12,178 £666 5.5 2018 7 £13,245 £12,588 £6
Slide 30: 2025 Bonus declaration – offshore bonds
2025 Bonus declaration – offshore bonds
Slide 31: Fund returns and asset allocations
Fund returns and asset allocations Fund return Sterling (%) Euro (%) Dollar (%) 2024 7.3 9.2 6.0 Asset allocation – 31 Dec GBP sub fund (%) Euro sub fund (%) Dollar sub fund (%) 2024 UK Equities 10.1 (11.8) 4.8 (5.0) 4.2 (4.7) Overseas Equities 26.9 (26.9) 33.5 (34.5) 32.1 (33.6) Property 13.2 (13.4
Slide 32: Regular Bonus rates
Regular Bonus rates International Prudence Bond Regular bonus rate % New money rate* % 2025 2024 2025 2024 Sterling With-Profits 1.75 1.75 6.35 6.60 Euro With-Profits 1.25 1.25 5.35 5.70 Dollar With-Profits 1.25 1.25 6.15 6.55 * The new money rate represents the overall yield, made up of Regular and
Slide 33: Year on year changes – Offshore Bonds (IPB or PIIB)
Year on year changes – Offshore Bonds (IPB or PIIB) Plans taken out in March 2002 Year on year return over the year Single Premium Value in 2025 increase in value % Sterling With-Profits £100,000 £377,963 £21,938 6.21 Euro With-Profits €150,000 €403,953 €25,858 6.84 Plans taken out in March 2003 Yea
Slide 34: 2025 Bonus declaration – personal pensions
2025 Bonus declaration – personal pensions
Slide 35: How does all this translate for customer returns?
How does all this translate for customer returns? 20 year Prudential Personal Pension performance relative to Total Annualised alternative investment products (based on a monthly premium of pay out return £200 and retiring on 1 May 2025) Prudential With-Profits Individual Pension £87,646 6.1% Averag
Slide 36: Year on year changes – Prudential Personal Pension
Year on year changes – Prudential Personal Pension Typical increases in plan values over previous 12 months based on a regular premium of £200 per month Year on year increase in value Plan taken out in Duration Value in 2025 Value in 2024 return over £ the year * % 2020** 5 £13,908 £10,787 £3,121 5.
Slide 37: 2025 Bonus declaration – Trustee Investment Plan
2025 Bonus declaration – Trustee Investment Plan
Slide 38: Trustee Investment Plan
Trustee Investment Plan Currency Date Claim Date (1) Claim Value Overall Yield (2) 01/04/2020 01/04/2025 £137,338 6.5% 01/04/2019 01/04/2024 £123,212 4.3% 01/04/2018 01/04/2023 £122,383 4.1% 01/04/2017 01/04/2022 £126,759 4.9% 01/04/2016 01/04/2021 £122,768 4.2% 01/04/2015 01/04/2020 £137,398 6.6% 0
Slide 39: 2025 Bonus declaration - annuities
2025 Bonus declaration - annuities
Slide 40: With-Profit Annuity
With-Profit Annuity Regular Bonus Rate 2025 2024 With-Profit Pension Annuity 1.75 1.75
Slide 41: With-Profit Annuity
With-Profit Annuity 2025 Additional Bonus Rates 2024 Additional Bonus Rates 2025 Average yearly increase in income Bonus year of entry Duration since purchase 1991/92 34 349.00 327.00 7.7 1992/93 33 389.00 364.00 7.9 1993/94 32 259.00 241.00 6.9 1994/95 31 298.00 278.00 7.2 1995/96 30 264.00 246.00
Slide 42: Income Choice Annuity returns
Income Choice Annuity returns Anniversary Effective Date 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 9/3/09 to 5/4/09 7.10% 8.50% 9.00% 7.00% 6.00% 8.00% 8.50% 5.00% 10.00% 12.00% 2.50% 17.50% 5.00% 19.00% 2.00% 6.50% 8.00% 6/4/09 to 5/4/10 7.10% 7.10% 6.50% 5.00% 7.5
Slide 43: Income Choice Annuity – year on year increases in payment
Income Choice Annuity – year on year increases in payment Year of announcement - 2025 Required Smoothed Return (RSR) Effective date of annuity MIN MAX 09 March 2009 to 05 April 2009 6.9 1.9 06 April 2009 to 05 April 2010 6.4 1.4 06 April 2010 to 05 April 2011 6.4 1.4 06 April 2011 to 05 April 2012 6
Slide 44: Past performance – Income Choice Annuity average yearly increases
Past performance – Income Choice Annuity average yearly increases in annuity payments since purchase Year of announcement - 2025 Required Smoothed Return (RSR) Effective date of annuity MIN MAX 09 March 2009 to 05 April 2009 6.9 1.8 06 April 2009 to 05 April 2010 6.2 1.2 06 April 2010 to 05 April 20
Slide 45: Summary
Summary
Slide 46: Summary
Summary Clive Bolton, Chief Executive Officer, M&G Life, said: “The Prudential With-Profits Fund delivered a strong return in 2024 despite ongoing uncertainty due to political events, conflicts and higher interest rates. Our global diversification paid off as most of our fixed income and regional eq
Slide 47: PruFund Quarterly Update – Feb 2025
PruFund Quarterly Update – Feb 2025
Slide 48: What we will cover
What we will cover • Expected Growth Rates (EGRs) • Unit Price Adjustments (UPAs) • Market context • PruFund performance
Slide 49: EGR decision
EGR decision • Following the usual quarterly review; EGRs remain unchanged
Slide 50: Example EGRs
Example EGRs Product Fund EGR from 25 Feb 2025 PruFund Growth S2 6.00% Onshore Bond PruFund Cautious S2 5.40% PruFund Growth Pn ISA 7.30% ISA PruFund Cautious Pn ISA 6.60% PruFund Growth Pn Ser E 7.30% Pension PruFund Cautious Pn Ser E 6.60% For full details of all EGRs: https://www.pruadviser.co.uk
Slide 51: Example EGRs
Example EGRs Product Fund EGR from 25 Feb 2025 PruFund Risk Managed 1 6.10% PruFund Risk Managed 2 6.50% ISA/Pension PruFund Risk Managed 3 7.00% PruFund Risk Managed 4 7.40% PruFund Risk Managed 5 7.70% Product Fund EGR from 25 Feb 2025 PruFund Planet 1 6.10% PruFund Planet 2 6.50% ISA/Pension PruF
Slide 52: Example EGRs
Example EGRs Product Fund EGR from 25 Feb 2025 PruFund Growth GBP Ser B 7.30% Offshore Bond PruFund Cautious GBP Ser B 6.60% Product Fund EGR from 25 Feb 2025 PruFund Growth EUR Ser B 6.60% Offshore Bond PruFund Cautious EUR Ser B 5.70% Product Fund EGR from 25 Feb 2025 PruFund Growth USD Ser B 7.20
Slide 53: A reminder of the EGR methodology
A reminder of the EGR methodology • The EGR is an estimate of the expected investment return over the long-term, at least 15 years • Our in-house stochastic asset model is used to generate a distribution of possible future investment returns (having regard to the current asset mix in each fund) over
Slide 54: Preferable not to make frequent changes
Preferable not to make frequent changes 16 changes of EGR over 82 individual quarterly review points 8.00% 26/02/2006 25/11/2022 26/05/2009 26/11/2009 27/05/2014 25/02/2016 25/05/2023 7.00% 26/11/2012 25/08/2022 27/08/2024 25/11/2014 25/05/2016 25/02/2022 6.00% 25/08/2016 27/08/2019 26/05/2020 5.00%
Slide 55: Expectation vs reality
Expectation vs reality
Slide 56: EGRs – expectation and reality
EGRs – expectation and reality ABI Mixed 20-60% Shares return Investment date PruFund Growth EGR at outset PruFund Return after 10 years after 10 years 25/11/2004 6.60% 6.64% 4.33% 25/11/2005 6.60% 6.21% 3.36% 25/11/2006 6.85% 5.74% 3.26% 25/11/2007 6.85% 5.56% 4.00% 25/11/2008 6.85% 7.64% 5.85% 25/
Slide 57: Unit Price Adjustments (UPAs)
Unit Price Adjustments (UPAs) • UPAs reflect the actual past performance of each PruFund and the smoothing approach followed • They are formulaic and non-discretionary • For S2, Series A, Series B and Series D; there is a Daily Smoothing Limit and a Quarterly Smoothing Limit • For Series C, E and F;
Slide 58: Quarterly UPA checks
Quarterly UPA checks
Slide 59: UPAs – a reminder of what’s required
UPAs – a reminder of what’s required • To trigger a UPA for quarterly versions in Feb 2025 requires movement in unsmoothed fund to at least equal: - growth in Smoothed Price (SP) as a result of EGR, plus - sufficient movement to make up difference from USP/SP start position and upper/lower smoothing
Slide 60: Performance of markets since Nov 2024
Performance of markets since 25 Nov 2024 BoA Euro BoA US FTSE Asia IA Mixed IA Mixed IA Mixed UK Gilts All Corporate BoA Sterling Corporate BoA Euro HY BoA Sterling BoA US HY FE UK FTSE Dev FTSE Europe Pacific ex MSCI Emg Investment 0- Investment Investment IA Flexible PruFund BoE Base Rate Stocks H
Slide 61: UPAs – a reminder of what’s required
UPAs – a reminder of what’s required • Last UPA for PruFund Growth Ser A, in August 2023, was -2.80% • This means the gap between Smoothed Price (SP) and Unsmoothed Price (USP) was 5.60%
Slide 62: The Smoothed Price performance is not the same as the Unsmoothed Price
The Smoothed Price (SP) performance is not the same as the Unsmoothed Price (USP) performance 120.00 115.00 SP = 111.5p 110.00 105.00 +5% SP = 100p100.00 -5% 95.00 90.00 This is a hypothetical example to illustrate the mechanics of the smoothing process. It does not represent any actual version of P
Slide 63: The Smoothed Price performance is not the same as the Unsmoothed Price
The Smoothed Price (SP) performance is not the same as the Unsmoothed Price (USP) performance 120.00 115.00 14.75% 110.00 105.00 +5% SP = 100p100.00 SP = 97.2p -5% 95.00 90.00 This is a hypothetical example to illustrate the mechanics of the smoothing process. It does not represent any actual versio
Slide 64: The Smoothed Price performance is not the same as the Unsmoothed Price
The Smoothed Price (SP) performance is not the same as the Unsmoothed Price (USP) performance 120.00 20.50% 115.00 14.75% 110.00 9.00% 105.00 +5% SP = 100p100.00 SP = 97.2p -5% 95.00 90.00 This is a hypothetical example to illustrate the mechanics of the smoothing process. It does not represent any
Slide 65: Performance of multi asset sectors since Aug 2023
Performance of multi asset sectors since 25 Aug 2023 IA Mixed Investment 0-35% IA Mixed Investment 20-60% IA Mixed Investment 40-85% IA Flexible Investment 22.00 20.00 18.00 19.26 19.43 16.00 14.00 15.13 12.00 12.25 10.00 8.00 6.00 4.00 2.00 0.00 Performance of IA Mixed Investment sectors in GBP ove
Slide 66: PruFund performance
PruFund performance
Slide 67: PruFund Growth – 5-year performance (to end 2024)
PruFund Growth – 5-year performance (to end 2024) 40 30 29.98% 28.48% 20 13.81% 10 8.95% 0 -10 -20 31/05/2023 30/06/2023 31/12/2023 29/02/2024 31/08/2024 30/09/2024 31/12/2019 31/01/2020 29/02/2020 31/03/2020 30/04/2020 31/05/2020 30/06/2020 31/07/2020 31/08/2020 30/09/2020 31/10/2020 30/11/2020 31/
Slide 68: PruFund Growth – 5-year performance (by calendar year)
PruFund Growth – 5-year performance (by calendar year) 20 2020 2021 2022 2023 2024 15 10 5 0 -5 -10 -15 -20 27/04/2021 27/01/2022 02/11/2022 07/08/2023 24/01/2020 19/02/2020 16/03/2020 09/04/2020 05/05/2020 29/05/2020 24/06/2020 20/07/2020 13/08/2020 08/09/2020 02/10/2020 28/10/2020 23/11/2020 17/12
Slide 69: PruFund Growth Ser A – quarterly rolling 5-year annualised returns
PruFund Growth Ser A – quarterly rolling 5-year annualised returns 12.00 10.00 8.00 6.00 4.00 2.00 0.00 Jun-24 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Jun-22 Jun-23 Mar-16 Mar-24 Dec-15 Dec-13 Mar-14 Sep-14 Dec-14 Mar-15 Sep-15 Sep-16 Dec-16 Mar-17 Sep-17 Dec-17 Mar-18 Sep-18 Dec-18
Slide 70: PruFund Growth Ser A – quarterly rolling 10-year annualised returns
PruFund Growth Ser A – quarterly rolling 10-year annualised returns 10.00 9.00 8.00 7.00 6.00 5.00 4.00 3.00 2.00 1.00 0.00 Dec-18Mar-19Jun-19 Sep-19Dec-19Mar-20Jun-20 Sep-20Dec-20Mar-21Jun-21 Sep-21Dec-21Mar-22Jun-22 Sep-22Dec-22Mar-23Jun-23 Sep-23Dec-23Mar-24Jun-24 Sep-24Dec-24 Dec- Mar- Sep- Dec-
Slide 71: Historic maximum withdrawal rate without erosion of capital
Historic maximum withdrawal rate without erosion of capital Basis of analysis • Initial investment of £100,000 made 31 December (starting year varies as per figures shown) • Rate shown is equivalent to fixed monthly withdrawal, e.g. 4.2% is £4,200 pa or £350 pm • Withdrawals are taken at end of each
Slide 72: Historic maximum withdrawal rate without erosion of capital
Historic maximum withdrawal rate without erosion of capital Table shows maximum withdrawal rate, as % of initial investment, that can be taken without loss of initial investment at end of time period indicated Start 31/12/2014 Start 31/12/2015 Start 31/12/2016 Start 31/12/2017 Start 31/12/2018 Start
Slide 73: Historic maximum withdrawal rate without erosion of capital
Historic maximum withdrawal rate without erosion of capital Table shows maximum withdrawal rate, as a monthly amount, that can be taken without loss of initial investment at end of time period indicated Start 31/12/2014 Start 31/12/2015 Start 31/12/2016 Start 31/12/2017 Start 31/12/2018 Start 31/12/
Slide 74: Thank you for your time
Thank you for your time If you would like any further information, or support, then please contact your Prudential Account Manager