Standard Life Assurance. Reduced final bonus.

mab

We have recently been offered compensation for mis-selling of two Standard Life mortgages by Abbey. The one matured on 8th August and was supposed to be nearly meeting its target of £23,200. On 4th August, SL reset their final bonus payouts and the value dropped by £1,650 overnight. Luckily, we had not yet accepted Abbey's offer and they have said that they will recalculate the payout for us. Be careful about this if you are in this situation.

Milarky

Yes, I hadn't noticed this until today [I checked their valuation on 1st of August, thinking that was when any six-monthly adjustment would be announced. It wasn't until the 4th of course!]

Strange thing [and this happened in February, too] was that the 'basic value' stepped up without an additional premium being paid, whilst the 'final bonus' rate dropped slightly [from 3% term adjusted to 2% at 18 years] I don't know what are the corresponding 25 year percentages yet, I will contact them tomorrow. But the annoying thing is, my policy has been with the TEP market-makers for the last couple of months. The reduction in '25 year' plan values - even though my policy surrender value went up slightly the other day - is what they actually use to value policies. Thus the policy will now less likely to sell than it was.

I couldn't sell last November -because nothing moved and SL then cut bonuses in February - and the same thing has happend again now. [Pretty dismal, really.]

The way things look, I might as well take it off the market before Christmas and wait for the DM details and vote.

EdInvestor

Hi Milarky

Milarky wrote:

The way things look, I might as well take it off the market before Christmas and wait for the DM details and vote.

If your TB is already down to 2 or 3% can't see why you would want to do anything else but wait for the windfall.

dunstonh

You could be cynical and say that they are preparing for a mass exodus of funds after DM. Its like they have realised that there is very little chance of the money staying with them after DM so why add much before hand.

Its also a bit nasty at a time when TBs are increasing with other providers. I even saw a policy with Pearl last week that had some additional bonus when it didnt have any a year earlier. If Pearl can manage it, you would think SL could.

Milarky

dunstonh wrote:

TBs are increasing with other providers. I even saw a policy with Pearl last week that had some additional bonus when it didnt have any a year earlier. If Pearl can manage it, you would think SL could.

That's slightly reassuring then, as they like to compare themselves to other WP companies almost entirely [i.e. nothing else is as poorly performing as WPs]

EdInvestor wrote:

If your TB is already down to 2 or 3% can't see why you would want to do anything else but wait for the windfall.

Yes, my surrender value is almost all 'guaranteed' now. I've looked at getting some kind of premium over SV from the TEP market and they've quoted figures up to about 10% above SV most recently - thus I would either sell now or surrender after DM. The trouble is neither SL or the second hand market wants "these kinds of policies" because muggins here took his out in 1987 and 1988 was the peak sales year. So there is a big bulge of maturity dates around 2012/13.