Endowment policy holders with Standard Life have been cheered with double digit returns on their investments for 2006, easing the deficit that many face on their policies.

Standard Life said that the rise in stock markets in 2006 would lead to year-on-year increases on payout. They also said that the growth in fund values would enable them to reduce the number of with profits policies that are subject to punishing exit fees.

However they refused to increase guarantees for their with-profits policy holders, they claim that any increase in annual bonuses would hinder their ability to fund further growth. Standard Life said that annual bonus rates would remain at the same level as for 2006 in order to maintain its investment flexibility.

Mortgage endowments are expected to increase at a rate of 5.75% under the guidelines of the FSA, the growth rate for Standard Life in 2006 of 10.4% should go some way to cutting current shortfalls, however despite a more positive year the number of people who will be unlikely to pay off their mortgage with their endowment policy remains at the 90% mark.