There may be some clients with one or more of the remaining 261,000 Equitable Life pension policies and have been wondering over the years what to do with the funds held with the troubled insurer. Well, the recent announcement that the company is at long last to be shut down will we think be greeted as very welcome news. Eighteen years after it’s near collapse when it had failed to put aside enough money to pay for guaranteed pension payments and closed to new business, Equitable Life is being sold to the Life Company Consolidation Group for £1.8bn. All existing with profit policies will be closed with funds switched to unit-linked assets.
The deal will involve an average windfall per policyholder of around £6,900 as long as members agree to the move with a vote scheduled for 2019. If this is agreed it will see the end of the UK’s oldest mutual life insurer having been established in 1762.
It may well be therefore a sensible strategy for policyholders to stay put as they will see a substantial uplift in policy values if the deal goes through although if you are one of those affected independent financial advice is strongly recommended with this commentary not to be construed as such.