Legal & General has reported a year of strong growth on the assets held for its with profits policyholders with a return of 9.6% (before tax) for the 12 months to 31 December 2014.

The company added bonuses worth £387 million to its with profits policies last year, down from £490 million in 2013. The reduction reflects a smaller number of mortgage endowment policies maturing in 2014 (29,000 in 2014 compared to 45,000 in 2013), the business said.

Over 25 years the assets held on behalf of Legal & General’s with profits policyholders have returned 8.1% per annum before tax and over 10 years the annual return is 7.0% before tax. This has exceeded the return on an average balanced fund and continues to be more than double the average inflation rate over the same period, based on the Retail Prices Index (RPI).

Jackie Noakes, managing director mature savings, Legal & General Assurance Society, said: “Our with profits customers will benefit from another year of strong investment returns for 2014 of 9.6%. This clearly demonstrates the benefits for our existing customers of remaining invested with a with profits provider operating active management of a balanced asset mix.

“By investing in a broad spread of assets we continue to deliver steady growth to our policyholders who also benefit from protection from market volatility through ‘smoothing’ of payouts.”

Following the closure of the With Profits Fund on 31 January 2015, future bonuses may include a distribution of the inherited estate. No distribution has been made as part of this declaration.

For customers whose endowment mortgages are not yet at maturity, regular bonus rates are being maintained.