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Equitable Life with profits pension / takeover.

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  • pafpcgpafpcg Forumite
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    Guidotkp wrote: »
    ..... However, in 2014 an article in The Telegraph stated "The average age of the 400,000 policyholders invested in the with-profits fund is 59...". So presumably the average age is now about 64. As Equitable has been closed to new business for nearly 20 years, it seems likely that nearly all policyholders will be "nearing the stage of taking benefits".
    I agree that the average age of policyholders will have risen but not by the number of elapsed years simply because the older policyholders will have left the Equitable to take their benefits at a greater rate than younger members.
    ......
    As I argue above, even if you are 20 years away, the enhanced distribution is better than a guaranteed return of 3.5%.
    Hmm, doesn't 3.5% compounded annually over twenty years give an increase of 92%?

    But I think you may be underestimating the value of the "guarantee". It isolates us from the volatility of the markets - our funds can't (or shouldn't!) go down. My partner's Equitable fund is only a small element of the overall fund which we have for our retirement, but I've always regarded that "guarantee" as a safety net if things go wrong. As Mordko implies in the post above, Equitable policyholders are a cautious bunch....

    I, too, would welcome comments from anyone willing to put their head above the parapet and make the case for voting against the proposal.
  • GuidotkpGuidotkp Forumite
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    You’re right. An uplift of 70% only gets you ahead of the game by 16 years, not 20. That’s still enough for me.
  • JohnWinderJohnWinder Forumite
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    '....the "guarantee". It isolates us from the volatility of the markets - our funds can't (or shouldn't!) go down.'
    That's a pretty low standard to set your retirement savings investment, even a small part of it: zero % nominal return! And you could get that in a cash management fund earning 0.5%/yr while charging 0.5%/yr! There'd be little market volatility in that, grim as it is.
    For this small segment of your retirement savings, if preferred to be as safe as zero% real return, might a better choice be a small lifetime annuity.
    Not to suggest you should vote 'yes'.
  • pafpcgpafpcg Forumite
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    Guidotkp wrote: »
    You’re right. An uplift of 70% only gets you ahead of the game by 16 years, not 20. That’s still enough for me.
    And me too!
  • POPPYOSCARPOPPYOSCAR Forumite
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    Does anyone know if you keep your fund as cash for 6 months can you take lump sums from it?
  • pafpcgpafpcg Forumite
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    POPPYOSCAR wrote: »
    Does anyone know if you keep your fund as cash for 6 months can you take lump sums from it?
    My understanding is that you can keep your "post-transfer uplifted" fund in a cash fund for 6 months (and protected from loss). After that, it will be automatically moved in tranches to other funds unless you do something with it.

    From my reading of the current Equitable arrangements (which Utmost are obliged to honour for at least 12 months and maybe idefinitely?), you should be able to withdraw funds in tranches provided each withdrawal is at least £1,000. Read the Equitable's web-site for details.
  • POPPYOSCARPOPPYOSCAR Forumite
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    pafpcg wrote: »
    My understanding is that you can keep your "post-transfer uplifted" fund in a cash fund for 6 months (and protected from loss). After that, it will be automatically moved in tranches to other funds unless you do something with it.

    From my reading of the current Equitable arrangements (which Utmost are obliged to honour for at least 12 months and maybe idefinitely?), you should be able to withdraw funds in tranches provided each withdrawal is at least £1,000. Read the Equitable's web-site for details.

    Yes I understand all of that.

    I was just double checking that by keeping it in the cash fund for 6 months the same terms would apply ie being able to exercise the lump sum withdrawals.

    Nothing seems clear.
  • archer123archer123 Forumite
    62 posts
    Part of the Furniture 10 Posts Combo Breaker
    I've just taken another look at my personal illustration.

    I already have an uplift of 35% (Capital Distribution) applied.
    I already get a guaranteed increase of 3.5% per annum.

    The numbers they (EL) show my secondary uplift, should I choose to go with Utmost and give up my guarantees, to be a further 26.6% not 71%.

    Sure, it is 71% of the original with profit value. I calculate it would only take 7 yrs compound to makeup this extra guarantee.

    Question is, who do you trust most?

    Decision time is getting close....
  • JohnWinderJohnWinder Forumite
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    I trust the maths, but are the assumptions correct?
    Your current 35% capital distribution is not guaranteed to grow by 3.5%/yr were you to remain with EL, which is the basis of your calculation. That existing uplift will remain at risk while your policy is with EL; surely they've been making that point for years.
  • archer123archer123 Forumite
    62 posts
    Part of the Furniture 10 Posts Combo Breaker
    [Thanks John for the comments. Yes, nothing is guaranteed in the world of pensions! Playing a bit of devils advocate here: We now know roughly how much extra EL has in the kitty - they are offering me £30k more than the +35% already on the table, so with their cautious strategy, I cannot see them hitting the buffers in the near term. Can you?
    My other big pension investment with Phoenix lost money last year, and if this weeks equity crash translates into another bad year, who is say the new provider I choose won't lose money short-term. 2 x bad years at -10% and I'm already worse off than my 3.5% pa guarantee with EL and current uplift. Get my point?
    So, in an ideal world I'd love the extra uplift offered by the move to Utmost, but then I would like to get re-invested into a similar strategy that EL currently offer ie. +3.5% steady, guaranteed (almost) return.
    I'm 66 and would rather take no more risks.
    Any advice or fund suggestions? Go with Utmost and move to a rock solid 3 - 4% return fund or stick with EL?
    I just don't need any more losses at this stage. Thanks.
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