Equitable Life: guaranteed annuity rate fiasco
Mr. S thought he had done everything necessary to secure himself a comfortable retirement. After working as a senior professional for 40 years, and following a huge amount of research, he put his pension money into an Equitable Life policy. Then, a few weeks later, the insurer lost a multibillion-pound legal battle regarding guaranteed annuity rates, setting off a chain of events that saw it almost collapse.
The fallout from has been dramatic. Mr. S suffered a sharp drop in pension income and, as a result, he and his wife decided to downsize to a bungalow. Even though he had retired in 2000, he worked as a consultant for five years to supplement his falling income. It was his sample case that was investigated by parliamentary ombudsman Ann Abraham in her first inquiry into the Equitable debacle.
Mr. S put £500,000 into an Equitable Life with-profits annuity in June 2000, just weeks before the insurer lost a case over “guaranteed annuity rates” sold as part of its pension plans. In 2003, the company announced savage cuts to the incomes paid to its with-profits annuity holders as it attempted to shore up its precarious finances.
Don’t you agree that compensation is in order? Before it’s too late.
