Insurer Standard Life said yesterday it was increasing or maintaining payouts for its long-term savers despite 2007 being a "difficult year".

The former mutual said bonuses paid to with-profits policyholders would be at least the same as last year and in some cases higher.

Annual bonuses on unitised with-profits policies are being increased by 0.5 per cent to 2.5 per cent for pensions and bonds and two per cent for other life policies, except for investments that contain a growth guarantee.

Bonuses paid on conventional with-profits policies will be the same as last year at 0.25 per cent of the sum assured, with life policies receiving a 0.5 per cent additional bonus and pensions policies receiving one of 0.25 per cent.

As a result of the latest bonuses someone who paid £50 a month into an endowment policy for 20 years will receive a final payout of £22,724, in line with payouts of £22,224 if the same policy had matured last year.

The group added that it was continuing to distribute surplus money built up in the with-profits fund, known as the inherited estate, to eligible policyholders whose investments had matured or been surrendered, although the actual payouts varied.

Jim Black, actuarial director at Standard Life, said: "2007 has been a difficult year for financial markets, particularly over the second half as the global credit crisis began to take hold.

"In spite of this volatile background payout values for all types of with-profits plans have increased over the last year."

But, despite the increase, the group admitted that just six per cent of people who had taken out a with-profits endowment policy to pay off a mortgage were on track to have enough money to repay their home loan.

Instead, 87 per cent of those who took out one of the investments are not expected to be able to repay their mortgage in full when it matures and seven per cent are unlikely to be able to do so.

With-profits are long-term savings that aim to smooth out stock market volatility by holding back some returns in good years to pay out in bad ones. The policies are often taken out as a pension or an endowment policy.