Our Illustrations – Rest of the World
Fund-specific growth rates used in our illustrations – applicable in Qatar
Illustrations with fund-specific growth rates are only for use in Qatar.
Because of the uncertainty of any future investment returns, we show three example rates of projected investment growth in our product illustrations – low (5%), mid (7%) and high (9%).
These growth rates will now be used as our standard assumptions, but we also use lower rates if we think that the standard assumptions overstate the potential growth of investments held within a particular plan. These lower rates are known as ‘fund-specific’ growth rates. As the following table shows, each asset is allocated to one of seven types, which determines the growth rates used in calculations.
|Fund type||Typical holding in an asset of this type||Low growth rate assumption||Mid growth rate assumption||High growth rate assumption|
|Cash Deposit||Money held on deposit within a bank||-1.50%||0.50%||2.50%|
|Money Markets||Mainly cash/money markets, or combined cash/money markets and fixed interest||-1.25%||0.75%||2.75%|
|Fixed||Mainly fixed interest||-0.75%||1.25%||3.25%|
|Low Mixed||Mixed holdings, with at least half in cash/money markets and/or fixed interest||0.75%||2.75%||4.75%|
|High Mixed||Mixed holdings, with less than half in cash/money markets and/or fixed interest||2.25%||4.25%||6.25%|
|Property||Mainly direct holdings in property||1.50%||3.50%||5.50%|
Table of fund-specific growth rate
The projections for each asset held in a plan are calculated using the relevant fund-specific rates. These are then totalled to provide the combined projection for each of the low, mid and high growth scenarios. We also include an equivalent single growth rate on the illustration for information.
The low, mid and high growth rates used in the above table are worked out using research data provided by an independent company. They are not guaranteed and are not minimum or maximum rates. We review the growth rates each year. The last rates review and the last classification were in April 2021.
To illustrate the potential growth of a £100,000 investment in an Utmost International Isle of Man Limited bond, with 60% into an equity-type asset, and 40% into a fixed-type asset, we would calculate as follows:
|Growth rate||Potential growth|
|Low||Equity asset £60,000 growing at 5.00% a year
Fixed asset £40,000 growing at -0.75% a year
|Mid||Equity asset £60,000 growing at 7.00% a year
Fixed asset £40,000 growing at 1.25% a year
|High||Equity asset £60,000 growing at 9.00% a year
Fixed asset £40,000 growing at 3.25% a year