Standard Life�s 25-year mortgage endowment has returned 3.2% in the past year, and a policy maturing this month is now worth £34,701, well below the industry average and one-third of the pay-out in 2000.

Standard Life's 25-year mortgage endowment has returned 3.2% in the past year, and a policy maturing this month is now worth £34,701, well below the industry average and one-third of the pay-out in 2000.

Standard however was yesterday highlighting the virtues of with-profits investment in turbulent markets as it unveiled its latest annual returns for policyholders.

It said all plans had shown a positive return over the past 12 months and annual bonus rates were being maintained. Margaret Flaherty, in the newly-created post of with-profits communications manager, said: "The challenging financial market conditions that took hold in the second half of 2007 have continued into 2008. However, we are pleased to say that, despite the volatile conditions, values for all types of plan have grown over the past 12 months, with smoothing cushioning the impact of downward market movements."

A typical 20-year, £50-a-month, savings endowment grew by between 2.4% (10-year) and 4.6% (20-year) over the year, while pension plan returns ranged from 4.6% (20-year) to 8.9% (10-year).

A five-year with-profits bond is up by 5.4%, turning £10,000 into £14,684.

The positive returns are too weak to affect the near-90% of policies still in the red' zone, or needing an average 8%-a-year return to pay off the mortgage.

Standard in 2006 solved the "Equitable Life problem" by dividing its with-profits fund into segments, thus limiting the returns on policies already benefiting from guarantees of annual 3% and 4% growth. These now have only 19% equity backing, while stakeholder pensions have 67%.

Standard as usual highlights the superior returns of with-profits over a building society account, but not its comparative position on pay-outs. The most recent survey by Money Management magazine suggests that the average 25-year endowment pay-out across the industry earlier this year was £50,247, some 40% higher than Standard's current savings endowment pay-out of £35,914. The average 20-year pay-out of £25,475 was well above Standard's current £21,554. The average five-year with-profit bond, however, was below Standard's return at £13,68