12 April 2019

  • News

Sheffield Mutual bonus announcement & financial results for 2018

'Although investment conditions were decidedly difficult towards the end of 2018 and the political landscape was less than stable, I am delighted to report growth in key areas for the Society where assets grew to a record £144.3 million. We also attracted an increase to our membership and the total number of policies increased over the year.'

Jamie Bellamy, Chief Executive Officer

Overview of 2018 - Dig a little deeper...

2018 encountered challenging conditions for investors, both domestically and globally, with the MSCI world index falling by 14% in the final quarter alone. Geo-political tensions between the US and China had a significant impact on global markets, while the continued uncertainty surrounding Brexit frustrated UK markets.

The financial sector also saw a number of new regulatory requirements successfully and robustly implemented by our relatively small team, with the General Data Protection Regulation (GDPR), Insurance Distribution Directive (IDD), and the Senior Managers and Certification Regime (SM&CR) all coming into effect

Despite these challenges, the above charts demonstrate that the Society managed to achieve very respectable growth, with membership and total assets held by the Society both increasing through 2018. Most importantly, bonus rates were also kept at the same level as previous years due to the diversification we have within our portfolio, as well as strict criteria of picking quality investments.

Due to a slump in global investment markets during the final quarter of the year, Sheffield Mutual’s with-profits fund generated an overall investment return of -0.47%.
Our property portfolio performed strongly however, delivering a respectable 5.88% return, offsetting some of the unrealised losses on equities. Despite a less favourable year for our investment portfolio, through the process of ‘smoothing’ we  are able to rely on previous years’ excellent returns to maintain competitive annual bonus rates for all policies and terminal bonuses for qualifying policies.

We pride ourselves on our service to all members, new and existing, and due to the effect of our 'smoothing' policy have declared all policy bonuses in line with interim rates for 2018 – please see more information below.

What is 'smoothing'?

A particular feature of with-profits is ‘smoothing’. This is the process where we hold back some surplus profit in good years so we can top up policy bonuses in years where the performance is not as good. Smoothing aims to even out the short term ups-and-downs that is often associated when investing directly in the stock market and has enabled the Society to maintain stable bonus rates even in volatile markets.

Bonuses for the Tax Exempt Savings Plan, Tax Exempt Savings Plan with Life Assurance, Regular Savings Plan and Investment Bond are all calculated based on the 'Guaranteed Final Amount' amount, not the amount that has been paid in.

Bonuses for other policy types are calculated differently, please see the product literature for further information.


By Dawn Webb


Chief Commercial Officer

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