What is with-profits?
With-profits is a medium to long-term investment. Each with-profits policy:
- has guaranteed minimum benefits payable at specified times; and
- may have bonuses added to these guaranteed minimum benefits;
All policyholder money invested into with-profits (as part of a pension, life assurance or savings policy) is pooled together in part of our with-profits fund. What each policyholder gets back from their policy depends on the fortunes of the with-profits fund, in particular how well the investments have done in the relevant part of the fund.
With-profits investing includes a special feature called ‘smoothing’. Smoothing works by keeping back some of the gains earned in good investment years and using them to help pay bonuses in poor investment years.
Is this with-profits information relevant to me?
The information in this section may be of interest to you if you have a with-profits policy which was either:
- bought through a Lloyds TSB branch or a Lloyds TSB financial adviser after 3 March 2000
- or bought in any other way, such as through a financial adviser or directly from Scottish Widows, at any time
If you bought a with-profits policy before 3 March 2000 through a Lloyds TSB financial adviser or branch, these web pages aren’t relevant to you. You should have received a letter in 2004 explaining how your with-profits policy would work in the future. You can view an example of this with-profits letter.
You can find current information about how we manage our with-profits fund here, or for more general information on the management of our with-profits fund have a look at 'Your guide to with-profits'. Or if you know what you’re looking for you can use the links below.
Download useful documents
- Your guide to with-profits – these summarise how with-profits policies work.
- Principles and practices of financial management (PPFM) – this sets out how we manage our with-profits fund and with-profits policies in more detail.
- With-Profits Committee terms of reference – the With-Profits Committee reviews how we manage the with-profits fund and scrutinises any major proposals that affect the fund. The terms of reference explain in detail what the Committee does.
- Annual Report to With-Profits Policyholders from the Board – this shows that we manage our business in line with the PPFM and summarises the steps we have taken to ensure that we continue to do this and treat customers fairly.
- Asset mix of our with-profits fund
- Investment factsheet for the main part of our with-profits fund
- Scheme of Transfer 2015 – Scheme for the transfer to Clerical Medical Investment Group Limited of the whole of the long-term business of Scottish Widows plc.