Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Pincher
    • By Pincher 22nd Sep 16, 3:48 PM
    • 5,615Posts
    • 2,024Thanks
    Pincher
    Equitable Life Unit-linked funds switching
    • #1
    • 22nd Sep 16, 3:48 PM
    Equitable Life Unit-linked funds switching 22nd Sep 16 at 3:48 PM
    Just got a letter about an old AVC, from an old job, which is still with Equitable Life as units in unit-linked funds.

    "The Society have informed us that as they are in run-off so their unit-linked funds become smaller and smaller as policy holders retire. In consequence, the cost of administering the funds has become disproportionately large and the Society have mitigated this by combining funds."

    So units in High Income has become units in Pelican.
    Units in FTSE 100 has become units in FTSE All-Share.

    It looks like I'll be the last one to leave the party.
    More than ten years before I reach 65.

    Eventually, there won't be enough money left to run even one fund!

    Tontine, tontine, Tontine.

    Lets hope there's lots of reserves left, so it's all mine.



    Nightmare scenario is
    =============

    We regret to inform you, sir, that your AVC is worth £20k, and our costs are £20k for 2028, which allows us to close down the Ultimate fund nicely, but unfortunately your account ends up zero. Thank you for saving with Equitable Life.
    What happens if you push this button?
Page 1
    • wakeupalarm
    • By wakeupalarm 23rd Sep 16, 2:49 PM
    • 659 Posts
    • 282 Thanks
    wakeupalarm
    • #2
    • 23rd Sep 16, 2:49 PM
    • #2
    • 23rd Sep 16, 2:49 PM
    Nightmare scenario is real
    Last edited by wakeupalarm; 23-09-2016 at 2:52 PM.
    • Pincher
    • By Pincher 23rd Sep 16, 4:26 PM
    • 5,615 Posts
    • 2,024 Thanks
    Pincher
    • #3
    • 23rd Sep 16, 4:26 PM
    • #3
    • 23rd Sep 16, 4:26 PM
    "from a job the 49-year-old held for a few years in the late Nineties and early Noughties"

    Hmm, creepy how similar the time scales are.

    So far, it's been growing, but as the fund shrinks, and costs increase in percentage terms, who knows.
    What happens if you push this button?
    • bigadaj
    • By bigadaj 23rd Sep 16, 6:23 PM
    • 7,383 Posts
    • 4,419 Thanks
    bigadaj
    • #4
    • 23rd Sep 16, 6:23 PM
    • #4
    • 23rd Sep 16, 6:23 PM
    "from a job the 49-year-old held for a few years in the late Nineties and early Noughties"

    Hmm, creepy how similar the time scales are.

    So far, it's been growing, but as the fund shrinks, and costs increase in percentage terms, who knows.
    Originally posted by Pincher
    Can't you transfer out?
    • Pincher
    • By Pincher 23rd Sep 16, 11:18 PM
    • 5,615 Posts
    • 2,024 Thanks
    Pincher
    • #5
    • 23rd Sep 16, 11:18 PM
    • #5
    • 23rd Sep 16, 11:18 PM
    Can't you transfer out?
    Originally posted by bigadaj
    It's all tied up in a Final Salary scheme, so the AVC was supposed to buy extra benefit in the index linked annuity, which is also managed by Equitable Life. The company offered to transfer me into a defined contribution scheme, with £18k bribe, about 20 years ago, but I was stuck on "Final Salary is Best" mode. The £18k bribe was not because Equitable Life was going to collapse, it was to ween us off Final Salary, which is still under funded.

    At least I was not the silly colleague, whose financial adviser told him not to sign on for the employer's scheme at all, because a personal pension is more "portable". Hence he didn't even get the employer's contribution. A BSc in Mathematics, should ask for his tuition fee back.

    Just wanted to raise the issue, in case some body actually depended on the money coming through unscathed. If we are lucky, the costs are paid by the company scheme, and the fund merging is saving costs for the Final Salary scheme.

    It is pretty unnerving, though, if I really was the last one out.

    Just imagine, I live to 99, and they have to keep a whole pension scheme alive just for me. cheaper to just snuff me out with a pillow.
    What happens if you push this button?
Welcome to our new Forum!

Our aim's to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

195Posts Today

1,050Users online

Martin's Twitter