Pearl Assurance Saver Plan

tunneller_2

9 years ago my daughter took out a Pearl Assurance Saver Plan in her own name to make provision for her (then 2 year old) daughter should anything happen to her - her husband had just left her in the lurch. She now tells me that there have been no bonuses for the past two years. She has paid in approx £3700 to date and when she asked for a surrender value was told £2,566.
This seems to be a diminishing asset to me, but could she make it "paid up" or are her only options to either throw good money after bad OR can she make it paid up? I live the opposite end of the country to her & so haven't read what the plan consists of. Can't find anything on the net either - except for an old thread on MSE. I realise that Pearl are closed to further business of this type. Anyone have any bright ideas as to what her options are?

dunstonh

The Pearl Saver plan was a the old style traditional endowment savings plan.

Pearl have suffered heavily due to the mismanagment of previous owners AMP. They are now on their 3rd owner in 5 years and things do not look much better. Although the new owner is a bit of an unknown, he does have a history of buying companies and selling them on for profit. The funding is from venture capital companies and they have only one interest in mind and that is profit for them. The FSA though have told them that they cannot take any more out of Pearl until a full solvency report has been done.

AMP legally withdrew the reserves (known as orphan funds) and squandered them. Morally, it is my view, that they stole this money from the policyholders and all attempts to block them failed when the high court found in favour of AMP. AMP bought Pearl for just over 1 bill and then raided the 1 bill of reserves in effect using Pearls own money to buy Pearl. This 1 bill orphan fund, had it still existed, would have left Pearl in a very strong position today. As it happens, they are very weak and unlikely to return to paying bonuses again for the forseeable future and if they do, they will be much lower than they were in the past.

Your options are to continue, make paid up or surrender. The saver plan has heavy penalties on surrender and often paid up can be the sensible option as. Although you wont get any more returns (assuming things remain as they are), at least there wont be the big penalty. Before any decision is made though, there should be a check against the guaranteed sum assured and the annual bonuses to date. If the plan goes into paid up, the guaranteed sum assured is reduced heavily. There comes a point when it can make more sense to continue it.

Can you find out the guranteed sum assured and the annual bonuses to date? That will give a better idea of options.