Legacy policyholders still with the pension company are due a windfall.
Pension company Equitable Life is set to shut down, 18 years after it almost collapsed.
So long as members agree to the move in a vote scheduled for 2019, the insurer will transfer all policies to Reliance Life and its with profits fund will be closed for good.
In 2000, Equitable Life was hit by a major financial scandal which caused it to almost collapse. It had failed to put enough money aside to pay for promised pension payouts. Since then the company has been closed to any new business.
Policyholders will forgo current policy guarantees, but they are set to benefit from a large windfall. A total of £1.8 billion will be added to roughly 261,000 policies, resulting in an average windfall of £6,900.
According to Danny Cox, chartered financial planner at Hargreaves Lansdown: "This is a wonderful windfall for Equitable Life policyholders, who now stand to pick up a nice bonus as the with profits fund and Equitable Life shut up shop for good. There’s still a bit of a wait, but the uplift is so substantial it’s well worth hanging on for.
"The closure of the with profits fund and the end of the Society will draw a final line under the insurance society, almost two decades after the Equitable shut its doors to new business."
What investors should do
Currently, Equitable Life policyholders receive either their guaranteed policy value or the current value plus an uplift of 35% if they transfer or surrender their policy. That is set to increase significantly, to somewhere between 60 and 70% by the end of 2019.
It makes sense, therefore, for policyholders to do nothing for now. According to Cox: "Investors who can hang on will now see significant enhancements to their policy values. For those who can afford to do so, it clearly makes sense to wait."
This article was first published on our sister website Money Observer.
My late husband had a personal pension plan with them am I able to claim a d how do I go about it.
Can I claim on my late husbands Policy
Date of policy taken out 1998 on The death of the life Assured, Can you please advise.
Pension equitable life
If I decide to withdraw all monies will I still receive the expected windfall. Also, Might not benefit from the windfall. Regards
Pensions Cashed In
This whole affair has been very unfair, I had to take a deduction to transfer to another pension provider - this offer closes the matter, but leaves many out of pocket. A sad indictment of 'flawed pension investment' supervised by a weak government watchdog where the investor is treated poorly in a chain that sees seller & investment firm reaping all the benefits to the cost of the investor!
Just like Francis McCluskey, I too transferred my pension pot, years ago as a hedge against the trouble Equitable Life was in. Am I due for a compensation payout, bearing in mind the loss incurred at the time of transfer? Remember, when I started my pensions with Equitable Life, my bank manager told me I’d chosen, probably the best place, ever, to put my pension savings.
how safe is our money
our money will move over to the new company and is guaranteed for six months and then will be moved to other investment options all with various degrees of risk. Given that there is risk in normal financial situations how can we know how Brexit will affect our investments after October 31st. I don't have a huge investment but am I being naive in thinking that my money would be better staying in a guaranteed fund.
allready cash in 2010
Was advised to take cash setllement.