Standard Life has all but wiped out bonuses for 600,000 with-profits customers, saying it needs flexibility to invest for the future.
Bonuses on unitised life and pension plans have been halved to 0.25%, having been as high as 1.5% as recently as 2010.
"They are guarantees that have to be reserved for (by buying gilts) while we believe over the long-term equities will give more investment freedom," a spokeswoman said.
"What we have done is for the future."
The bonus cuts come despite the sub-fund used to back the policies returning 9.8% last year, while the overall with-profits "heritage fund", which is ring-fenced from Standard Life plc, returned 7.9%.
Annual bonuses on the with-profits bond have been held at 2.5%.
Standard Life with-profits communications manager Margaret Flaherty said: "We are pleased to say that customers have seen a year-on-year increase in the value of their plan.
"In the last year a typical pension customer has seen a return of 7% on their plan while a typical endowment customer has seen a return of 5%."
Standard said 98% of endowment customers were still in the "red" zone, facing a likely shortfall on savings target.
Patrick Connolly, financial planner at AWD Chase de Vere, said the £27,791 payout on the benchmark endowment had fallen by almost £10,000 since 2008, adding: "Unfortunately the days when Standard Life was considered to be one of the premier providers of with-profits investments seem to be long gone."