Pre-tax investment returns from L&G's with-profits funds recovered to 15.3 per cent in 2016, after a slump in the previous year.
The company closed the funds to new customers in 2015 after a post-RDR fall in sales - and returns in the doldrums at 3.1 per cent - but promised to “continue to deliver active investment management in the best interests of our with-profits customers”.
Jackie Noakes, managing director of Savings at L&G, said that the fund had delivered above-inflation returns over time.
"This clearly demonstrates the benefits for our existing customers of remaining invested in a fund with a broad range of assets. It also means that our with profits customers continue to see steady growth on their investments over the long-term, well in excess of inflation," she said.
Over 25 years the assets held on behalf of Legal & General’s with profits policyholders have returned 8.6 per cent a year before tax. Over 10 years the annual return is 5.9 per cent before tax.
The company added bonuses worth £316m to its with profits policies last year. This is lower than the £366m added in 2015, reflecting a gradual reduction in the number of customers as policies continue to mature.
The company said that a pension policy with a 15 year terms for a male retiring at 65 and making £200 monthly contributions has a retirement value of £56,979.
