UK insurer Norwich Union has told pension savers and endowment policyholders to expect lower payouts this year despite its main with profits fund achieving an overall return of 17.7% before tax.

The company said in the statement: In general, shorter-term policies show increases or small decreases compared to equivalent policies maturing a year ago, while those with a term of 20 and 25 years will generally be lower.

Policyholders of 25-year, GBP50 a month endowment mortgages maturing this month will receive 4% less than if an equivalent policy delivered a year ago. The UK’s biggest insurer said that payouts were likely to continue in their decline because our expectation of future investment returns has reduced compared to those historically earned.

The insurer, part of the Aviva group, points out in the statement that the important factor to the investor is the value added to the policy: For example, a CGNU 25 year savings endowment policy has seen a 9% reduction in payout compared to a year ago. However, if you compare the surrender value of this policy a year ago with the maturity value now, there has been a 12% increase in policy value over the year, after taking account of the further premiums paid.