34 Investment return

Investment return includes fair value gains and losses, excluding fair value movements attributable to available-for-sale (AFS) investments, dividends, rent and interest. Dividends are accrued on an ex-dividend basis. Interest and rent are included on an accruals basis. Interest income for financial assets which are not classified as fair value through profit or loss (FVTPL) is recognised using the effective interest method.

The group earns an investment return from holdings in financial instruments and property investments, held to back insurance and investment contracts on behalf of policyholders, and as group capital.

 

2014
£m

20131
£m

1.

Investment return has been restated to reflect the adoption by the group of IFRS 10, ‘Consolidated Financial Statements’. Further details are contained in Note 1.

2.

Interest income of £67m (2013: £63m) arose on financial investments designated as AFS. There were no impairments on assets classified as AFS during the year (2013: £nil).

Dividend income

4,265

4,496

Interest income on financial investments at fair value through profit or loss

4,875

4,942

Other investment income

(59)

(173)

Gains on financial investments at fair value through profit or loss

29,493

21,014

Gains on derivative instruments (designated as held for trading)

1,161

1,314

Realised gains on available-for-sale financial assets

35

38

Gains/(losses) on loans and receivables

1

(2)

Financial investment return2

39,771

31,629

 

 

 

Rental income

463

373

Fair value gains on properties

405

232

Property investment return

868

605

Investment return

40,639

32,234