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  • FIRST POST
    • pensionpawn
    • By pensionpawn 12th Apr 19, 11:19 PM
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    pensionpawn
    Equitable Life with profits pension / takeover.
    • #1
    • 12th Apr 19, 11:19 PM
    Equitable Life with profits pension / takeover. 12th Apr 19 at 11:19 PM
    I thought I would open a thread for everyone who have a pension with them who may wish to share their experience and offer advice while we wait for the resolution of the take over.

    I was within days of commencing a transfer to a Sipp last summer when the news broke and have stayed put watching my fund continue to grow at 3.5% whilst this all sorts itself out.

    I have seen no news since around last October. Does anyone else have anything to add?

    Equitable Life
    Last edited by pensionpawn; 12-04-2019 at 11:24 PM. Reason: Inclusion of link to Equitable Life.
Page 1
    • Mordko
    • By Mordko 13th Apr 19, 4:45 AM
    • 595 Posts
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    Mordko
    • #2
    • 13th Apr 19, 4:45 AM
    • #2
    • 13th Apr 19, 4:45 AM
    There was another letter saying all is well and proceeding as planned. I think it was relatively recent, maybe February? Not sure.
    • Joey Soap
    • By Joey Soap 13th Apr 19, 8:05 AM
    • 217 Posts
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    Joey Soap
    • #3
    • 13th Apr 19, 8:05 AM
    • #3
    • 13th Apr 19, 8:05 AM
    Good idea to start a thread. I have Equitable AVCs attached to a previous employment defined benefit scheme as a defined contribution AVC pot. I can't touch the AVC pot until I draw the defined benefit pension. I'm planning to draw the pension from the DB scheme maybe Ausust/September 2020. I don't know if the Equitable spin off and increaee in the AVC pot value will have happened by then. As far as I know, there isn't actually a published definite timescale.
    • Mordko
    • By Mordko 13th Apr 19, 12:38 PM
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    Mordko
    • #4
    • 13th Apr 19, 12:38 PM
    • #4
    • 13th Apr 19, 12:38 PM
    Transfer is supposed to have happened by the end of this year but nothing is ever “definite”. Vote should take place in summer.
    • POPPYOSCAR
    • By POPPYOSCAR 13th Apr 19, 12:51 PM
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    POPPYOSCAR
    • #5
    • 13th Apr 19, 12:51 PM
    • #5
    • 13th Apr 19, 12:51 PM
    Thank you for starting this thread.

    I am a little frustrated by Equitable as I feel apart from advising us to 'think twice' before doing anything until the possible transfer they have given very little information.

    I would like to know if we will still be able to take partial withdrawals as can be done at present for example.
    • pafpcg
    • By pafpcg 13th Apr 19, 3:25 PM
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    pafpcg
    • #6
    • 13th Apr 19, 3:25 PM
    • #6
    • 13th Apr 19, 3:25 PM
    I have seen no news since around last October. Does anyone else have anything to add?
    Originally posted by pensionpawn
    The latest situation, as reported by Equitable Life in the letter sent to the with-profits scheme holders several weeks ago, is as stated on the web-page in the link you posted - the date of the update is 7th March. It'll be a few months before the proposals are published, with the vote towards the end of the year.

    I would like to know if we will still be able to take partial withdrawals as can be done at present for example.
    Originally posted by POPPYOSCAR
    If I read correctly the answer to Question 7 in the Q&A page at https://www.equitable.co.uk/helpful-qas/ then it's "Yes", but you will lose a potential 25-35% uplift in the capital distribution on anything you withdraw before the completion of the transfer to Reliance Life. On the other hand, if the scheme members vote against the proposals, then the capital distribution will not be increased and may even go down! It wouldn't surprise me if the Equitable Life board use that fear to encourage members to vote for the deal.

    Of course, what we don't yet know is what Reliance Life (aka Utmost Life and Pensions) will be offering in terms of investments, returns and drawdown arrangements. To offer Equitable Life a substantial sum to take-over the with-profits scheme, they must be confident that the bulk of the existing members will be retained. Will there be incentives to stay or disincentives to leave? We don't know......

    Here's the text of the answer:

    "Q7: What happens if a policyholder leaves before the values are uplifted?

    "The opportunity to increase the current 35% capital distribution to a level expected to be between 60% and 70% would be lost. Policyholders should exercise great care before taking benefits in advance of the proposed uplift and an Independent Financial Adviser may help with this decision. One important consideration, where there is an urgent need for cash, is to draw down only a portion of savings. Most pension policyholders over age 55 are able to make withdrawals of 1,000 or more, leaving the balance of their with-profits fund to benefit from the uplift if the Proposal is implemented."
    Last edited by pafpcg; 13-04-2019 at 3:40 PM. Reason: typo
    • POPPYOSCAR
    • By POPPYOSCAR 13th Apr 19, 3:39 PM
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    POPPYOSCAR
    • #7
    • 13th Apr 19, 3:39 PM
    • #7
    • 13th Apr 19, 3:39 PM
    The latest situation, as reported by Equitable Life in the letter sent to the with-profits scheme holders several weeks ago, is as stated on the web-page in the link you posted - the date of the update is 7th March. It'll be a few months before the proposals are published, with the vote towards the end of the year.



    If I read correctly the answer to Question 7 in the Q&A page at https://www.equitable.co.uk/helpful-qas/ then it's "Yes", but you will lose a potential 25-35% uplift in the capital distribution on anything you withdraw before the completion of the transfer to Reliance Life. On the other hand, if the scheme members vote against the proposals, then the capital distribution will not be increased and may even go down! It wouldn't surprise me if the Equitable Life board use that fear to encourage members to vote for the deal.

    Here's the text of the answer:

    "Q7: What happens if a policyholder leaves before the values are uplifted?

    "The opportunity to increase the current 35% capital distribution to a level expected to be between 60% and 70% would be lost. Policyholders should exercise great care before taking benefits in advance of the proposed uplift and an Independent Financial Adviser may help with this decision. One important consideration, where there is an urgent need for cash, is to draw down only a portion of savings. Most pension policyholders over age 55 are able to make withdrawals of 1,000 or more, leaving the balance of their with-profits fund to benefit from the uplift if the Proposal is implemented."
    Originally posted by pafpcg

    No that talks about the current scheme not the new scheme.
    • pafpcg
    • By pafpcg 13th Apr 19, 3:47 PM
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    pafpcg
    • #8
    • 13th Apr 19, 3:47 PM
    • #8
    • 13th Apr 19, 3:47 PM
    No that talks about the current scheme not the new scheme.
    Originally posted by POPPYOSCAR
    You're too quick! Your response crossed with my editing of my post above after I realised that maybe you weren't asking the question I thought you were asking!

    We (the scheme members) won't know for several months. I doubt even the Equitable Life management know - only Reliance Life will know how they intend to retain our funds. How will they stop a mass exodus if what they offer is poor?

    Perhaps take at look at what Reliance Life is offering to its customers at the moment?

    Edit: "Reliance Life" renamed itself "Utmost Life and Pensions" last month. Their pensions offerings are here: www.utmost.co.uk/pensions/
    Last edited by pafpcg; 13-04-2019 at 3:53 PM. Reason: Added link to Reliance/Utmost web-site
    • Mordko
    • By Mordko 13th Apr 19, 5:19 PM
    • 595 Posts
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    Mordko
    • #9
    • 13th Apr 19, 5:19 PM
    • #9
    • 13th Apr 19, 5:19 PM
    I asked them about charges for switching out after the takeover. Here is the response:

    Thank you for your email of 21 February 2019.



    “We fully expect you to have the same retirement options as you do today. No charges are currently applied for transferring or switching and although such charges are allowed under the contract, Reliance Life have assured us there are no plans to introduce them. However, that is not to say this position will not change in the future.”
    • POPPYOSCAR
    • By POPPYOSCAR 21st Apr 19, 9:21 AM
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    POPPYOSCAR
    You're too quick! Your response crossed with my editing of my post above after I realised that maybe you weren't asking the question I thought you were asking!

    We (the scheme members) won't know for several months. I doubt even the Equitable Life management know - only Reliance Life will know how they intend to retain our funds. How will they stop a mass exodus if what they offer is poor?

    Perhaps take at look at what Reliance Life is offering to its customers at the moment?

    Edit: "Reliance Life" renamed itself "Utmost Life and Pensions" last month. Their pensions offerings are here: www.utmost.co.uk/pensions/
    Originally posted by pafpcg

    Thank you.

    Just looked and it says this.

    "Take your pension pot as a number of lump sums

    You can move your money to another pension pot and take lump sums from it as and when you need, until your money runs out or you choose another option. You can decide when and how much to take out. Any money left in your pension pot remains invested, which may give your pension pot a chance to grow, but it could go down in value too. Each time you take a lump sum, normally a quarter of it is tax-free and the rest will be taxable.

    You will need to transfer to a different pension provider to do this."

    So going by that we will not have the same terms as it stands now unless there are special terms for us although I cannot see that happening.
    • pafpcg
    • By pafpcg 22nd Apr 19, 12:06 PM
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    pafpcg
    So going by that we will not have the same terms as it stands now unless there are special terms for us although I cannot see that happening.
    Originally posted by POPPYOSCAR
    Thanks for your investigation.

    So, if the Reliance/Utmost pension-paying arrangements are unacceptable, would you vote against the takeover?

    I'm wondering if public speculation, at this stage, might be counter-productive. If something were to be published in, say, the Daily Telegraph or other media likely to be read by large numbers of Equitable Life policy holders, which showed Reliance/Utmost to be restrictive in what they offer, would the proposed takeover then be voted down? Or perhaps there was a recommendation: "vote in favour of the takeover to get the increased pension pot but immediately to transfer your pot to another provider", in which case might Reliance/Utmost panic, reduce their offer or pull-out entirely on the fear of losing too much business?

    We don't know what commitments there are already in place between Equitable and Reliance/Utmost which might mitigate such factors (other than that Equitable has insurance in place to cover any fall in the value of the fund's investments - such insurance probably means that Equitable must proceed with the vote within the timescale stipulated in the insurance). However, I would expect that there are some terms in any existing agreement between Equitable and Reliance/Utmost which limit what Equitable can announce and, crucially, give details on what avenues will be available to policy holders to transfer-out to a third-party provider after a takeover is agreed, ie "take the money and run!"

    My partner has a with-profits policy with Equitable Life which if the takeover goes ahead might increase in value by several tens of thousands; so, we're going to be try to be patient until the final offer is published and then seek advice and debate our options - switch to Reliance/Utmost for a few more years, buy an annuity immediately, transfer funds to her SIPP or some other option. For those needing their pension funds this year, it must be highly frustrating.
    • Mordko
    • By Mordko 23rd Apr 19, 12:32 AM
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    Mordko
    Personally I would vote “for” as long as there are no penalty fees for leaving Reliance
    • pafpcg
    • By pafpcg 28th Apr 19, 4:01 PM
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    pafpcg
    Equitable Life AGM 2019
    The paperwork for the Equitable Life 2019 AGM in May has been issued (mailing arrived yesterday) and can also be read on the Equitable web-site at
    www.equitable.co.uk/financials/annual-general-meeting-%28agm%29


    The proposed takeover of the with-profits fund by Utmost(Reliance) is covered in the Chairman's 2019 statement (www.equitable.co.uk/media/61300/chairmans-statement.pdf), but there's little that we didn't already know. The statement about the takeover concludes with this rather curiously-worded paragraph:
    The Board considered that Utmost Life and Pensions offered the best deal, while wanting to keep our staff, systems and building as a platform to add future acquisitions. This means that we can provide continuity of service for all policyholders.
    I presume that it's Utmost who want to use the facilities at Aylesbury as a platform to add future acquisitions!

    The statement refers to options which were rejected out of hand but nothing about any options which were seriously considered, other than the offer from Utmost. I wonder to what extent the preservation of the continued employment of the existing staff was weighted in the selection of offers - I'm sure others on this forum will also have been involved in takeovers where ruthless maximisation of the sales value of a company took absolute precedence over the prospects of employees.
    • POPPYOSCAR
    • By POPPYOSCAR 28th Apr 19, 4:12 PM
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    POPPYOSCAR
    Thanks for your investigation.

    So, if the Reliance/Utmost pension-paying arrangements are unacceptable, would you vote against the takeover?

    I'm wondering if public speculation, at this stage, might be counter-productive. If something were to be published in, say, the Daily Telegraph or other media likely to be read by large numbers of Equitable Life policy holders, which showed Reliance/Utmost to be restrictive in what they offer, would the proposed takeover then be voted down? Or perhaps there was a recommendation: "vote in favour of the takeover to get the increased pension pot but immediately to transfer your pot to another provider", in which case might Reliance/Utmost panic, reduce their offer or pull-out entirely on the fear of losing too much business?

    We don't know what commitments there are already in place between Equitable and Reliance/Utmost which might mitigate such factors (other than that Equitable has insurance in place to cover any fall in the value of the fund's investments - such insurance probably means that Equitable must proceed with the vote within the timescale stipulated in the insurance). However, I would expect that there are some terms in any existing agreement between Equitable and Reliance/Utmost which limit what Equitable can announce and, crucially, give details on what avenues will be available to policy holders to transfer-out to a third-party provider after a takeover is agreed, ie "take the money and run!"

    My partner has a with-profits policy with Equitable Life which if the takeover goes ahead might increase in value by several tens of thousands; so, we're going to be try to be patient until the final offer is published and then seek advice and debate our options - switch to Reliance/Utmost for a few more years, buy an annuity immediately, transfer funds to her SIPP or some other option. For those needing their pension funds this year, it must be highly frustrating.
    Originally posted by pafpcg

    It would be a question for me of weighing up the extra monetary value against what I could actually do/not do in the future and any penalties involved etc. which might make the enhancement a paper value only, if you see what I mean.

    So yes, if that were the case I might vote against it.
    • pafpcg
    • By pafpcg 29th Apr 19, 11:28 AM
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    pafpcg
    It would be a question for me of weighing up the extra monetary value against what I could actually do/not do in the future and any penalties involved etc. which might make the enhancement a paper value only, if you see what I mean.
    Originally posted by POPPYOSCAR
    The Chairman's Statement includes this promise:
    I fully understand that you will want to consider your own circumstances and weigh up the pros and cons of the proposal before deciding how to vote and what fund to invest in. This is why we will be offering guidance and subsidised advice through an independent service provider, as well as a personalised illustration of what the proposal could mean to you.
    By "subsidised advice", I assumed it won't be entirely free, but some may find that helpful. So long as Equitable don't hide behind the ruse of "If you want to work out your options, take up the offer of reduced-fee advice from SJP" if the "personalised illustration" proves to be inadequate.

    I certainly don't like the implication of the choices we're being offered: Vote Yes or No, then what fund you want to invest in. What if we don't like the terms offered by Utmost/Reliance? Will there be no option for "Put it in a transfer queue to my nominated SIPP/pension provider"?

    Sorry, is my cynicism showing this morning?
    • Mordko
    • By Mordko 29th Apr 19, 12:00 PM
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    Mordko
    Will there be no option for "Put it in a transfer queue to my nominated SIPP/pension provider"?
    I emailed a similar question and was told that transfers will be free, at least to start with
    • JohnWinder
    • By JohnWinder 1st Jun 19, 12:06 PM
    • 52 Posts
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    JohnWinder
    If the transfer of Equitable Life customers’ policies to Utmost is concluded, the choices offered by Utmost do not appear to be good on the whole.
    Most of the Utmost funds have entry fees of about 5%. Am I the only one to think that this predatory pricing has become a relic of the past with other fund managers and in other countries, and represents poor value for customers? Ten years ago Tim Hale in his popular book was advising ‘avoid initial fees’, yet all but two of Utmost’s funds have initial fees.
    The management expenses, as a percentage of funds invested, seem very high to me compared with similar products from other providers. 1.8%/yr for a deposit account sounds like price gouging, and many other funds have 5-7%/yr fees. How can a business justify this unless it’s operating largely for the shareholders rather than the customers, or is very inefficient in its running?
    One of the few legislated options for retirement savings is to take them as a number of lump sums; but with Utmost ‘You will need to transfer to a different pension provider to do this.’ Is this the level of service customers want?
    Another of the few options for retirement savings is to use your pension pot to provide a flexible retirement income; but with Utmost ‘Currently you will need to transfer to a different pension provider to do this.’
    Will it be a case of 'avoid the 5% entry fee if possible, and get out straight away'?
    • pafpcg
    • By pafpcg 3rd Jun 19, 12:16 PM
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    pafpcg
    Equitable Life mailing with take-over timetable
    There's been another mailing from Equitable Life (dated 28th May) with dates for the proposed take-over of the with-profits fund by Utmost Life & Pensions:

    22-July - Initial High Court Hearing to seek permission to seek a vote.
    early August - Decision Pack with details of the proposed take-over and voting forms.
    mid August - Investment Pack with details of the unit-linked funds offered by Utmost.
    30-Oct - deadline for voting.
    1-Nov - Formal Policyholders' Meeting and EGM.
    mid Nov - Second High Court Hearing to approve take-over.
    13-Dec - deadline for submitting investment choice by each individual policyholder.
    1-Jan - Implementation of the plan.

    From my skim reading of the accompaning booklet, it's all about the procedures and the legal framework of the proposed take-over of the with-profits fund - there's no new information about what Utmost will be offering, we'll have to wait until August for that.
    • POPPYOSCAR
    • By POPPYOSCAR 4th Jun 19, 8:57 AM
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    POPPYOSCAR
    There's been another mailing from Equitable Life (dated 28th May) with dates for the proposed take-over of the with-profits fund by Utmost Life & Pensions:

    22-July - Initial High Court Hearing to seek permission to seek a vote.
    early August - Decision Pack with details of the proposed take-over and voting forms.
    mid August - Investment Pack with details of the unit-linked funds offered by Utmost.
    30-Oct - deadline for voting.
    1-Nov - Formal Policyholders' Meeting and EGM.
    mid Nov - Second High Court Hearing to approve take-over.
    13-Dec - deadline for submitting investment choice by each individual policyholder.
    1-Jan - Implementation of the plan.

    From my skim reading of the accompaning booklet, it's all about the procedures and the legal framework of the proposed take-over of the with-profits fund - there's no new information about what Utmost will be offering, we'll have to wait until August for that.
    Originally posted by pafpcg
    Yes when I received it I thought good perhaps some actual information about the new scheme.

    But no.

    What a waste of paper.
    • chazzaboy
    • By chazzaboy 4th Jun 19, 9:59 AM
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    chazzaboy
    I am a with profits guy and Id like to know who is Utmost? Never heard of them - does anybody know their background - how safe are they? Also strange to me is that this changeover started with Reliance and seems odd to me that mid process to change - does anybody agree? Equitable appear to be a bigger player than Utmost so why not go with one of the big boys LV/Aviva etc?
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