Almost 90% of Standard Life mortgage endowments are still in the "red" zone, highly unlikely to meet their targets, despite a year of strong investment returns.

Standard did not include the update in its half- yearly bonus announcement yesterday, which it said heralded "good news for our with-profits customers with, for example, an average investment return of 13% over the past year for maturing endowment policies".

However, in response to an inquiry by The Herald, Standard said that in June 2007, of its 1.1 million mortgage endowments, 88% were still red, 6% amber (unlikely to hit target) and 6% green (likely), virtually unchanged from the 90% in the red zone a year ago.

A spokeswoman said: "We would expect shortfalls to decrease after this declaration but it mightn't have a huge impact on the percentages as the spreads are so wide."

The insurer was unveiling what it said were year-on-year increases across all types of policy, with better returns in prospect through an uplift in the equity content of its funds (now at 34.8%, plus 15.3% in property).

Standard has also begun to disburse its £1.3bn inherited estate, which was ring-fenced for policyholders on its flotation last year, enhancing maturing policies by tens or at most hundreds of pounds.

It said a typical £50-a-month 20-year savings endowment policy would have grown from £19,499 a year ago to a maturity value of £23,041 today. A typical £200-a-month 20-year individual pension would have grown from £80,793 last August to a retirement value of £91,097. An investment of £10,000 in a with-profits bond five years ago would have grown from £12,465 a year ago to a cash-in value today of £14,351.

However, latest figures published by Investment Life & Pensions Moneyfacts show with-profits pension pay-outs at Standard Life, which formerly prided itself on its high pay-outs, well below the industry average, especially on longer-term policies, They show Standard's 25-year with-profits pension maturing at £89,004 against an average of £105,272, and its 20-year pay-out the lowest of 14 providers. Its unit-linked pensions have performed satisfactorily, but the figures for with-profits bonds also show a weaker five-year return than that of many major rivals.

Trevor Matthews, head of Standard's UK business, commented: "All the annual bonus rates have been held this time. They are set so they steer the product towards the maturity date and so there is room for equity investment to give good returns."

On the lifting of bonus rates in the past two years by rivals, including Prudential and Norwich Union, Matthews said: "We haven't done that. We are trying to focus people's attention on the fact they have had a good return - if you were going to cash in a policy 12 months ago, look at the value you would have given up, 10% to 15% depending on the policy."

Matthews said the with-profits fund was in "extremely good shape" and was 100% owned by policyholders, rather than the 90% in other listed insurers, and the equity content of the fund - which sank to 31% last year - had been increased.

"We have increased equity backing ratios (EBRs) on average by about 2.5%," he said.

"We break it down into seven segments. I am surprised others don't, because there are different sets of policy- holders with different sets of guarantees.

"We have got very decent EBRs - 74% for stakeholder pensions." Bonds, with a 67% EBR, had performed strongly over seven years, he said, adding: "With-profits is not the opaque mystery black box of the past."

Standard said there had been a further reduction in unit price adjustments, or early surrender penalties, on some policies.

Jim Black, actuarial director of Standard Life Assurance, said: "We believe recent increases in equity backing ratios will have improved the long-term prospects for future with-profits returns.

"Standard Life's investment strategy takes into account the balance between risk and expected return while offering many with-profits customers valuable guarantees."