UK insurer Standard Life has cut bonuses on some of its policies for the seventh time in four years in a move likely to disappoint many of its customers.

The pension with profits one fund dropped half a percentage point to 2%, and some of the life with profits funds dropped from 2% to 1.5%. Other policies remained unchanged.

Standard Life said that despite steady stock market gains over the last two years, the current economic environment, characterized by low inflation and low interest rates, means that long-term returns on assets underlying most types of investment, including with profits, are much lower than in the past.

However, the payout on a 25-year, GBP50 a month with-profits savings endowment dropped 18% to GBP41806 from last year. The mutual, which is due to float on the stock market in the summer, warned that payouts may drop even further.

Mike Hogan, who runs member pressure group, said that: We are paying for years of catastrophic management. Standard Life paid out too much for many years. Then in the share crash of 2000 to 2003 it suffered huge losses. We’re now in a period of catch-up which is leading to further erosion of returns for investors.