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Utmost/Equitable

UncleEbenezer
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Utmost/Equitable

#420308

Postby UncleEbenezer » June 17th, 2021, 11:17 pm

Sometime in the 1980s, I opted out of a portion of my NI contributions, and paid them into the Equitable. Only the NI opt-out bit, and it wasn't for very long. When the Equitable collapsed, I mentally wrote it off.

More recently I've had contact from Utmost Life&Pensions, who now manage old accounts like mine. For an asset I'd written off, it comes as a very pleasant surprise to hear my pot with them is just over £100k. A surprise twice over: first because it's so much, second because it's a cash value at all: I had an idea Equitable worked with defined benefits - which was indeed why they got into trouble.

Is that right? How likely is it my pot should have a defined-benefit value they're reluctant to talk about (as per Snowbadger's thread from this post). Should I press them on the subject, or just take the money offered and be grateful?

mc2fool
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Re: Utmost/Equitable

#420311

Postby mc2fool » June 17th, 2021, 11:58 pm

UncleEbenezer wrote:More recently I've had contact from Utmost Life&Pensions, who now manage old accounts like mine. For an asset I'd written off, it comes as a very pleasant surprise to hear my pot with them is just over £100k. A surprise twice over: first because it's so much, second because it's a cash value at all: I had an idea Equitable worked with defined benefits - which was indeed why they got into trouble.

Is that right? How likely is it my pot should have a defined-benefit value they're reluctant to talk about (as per Snowbadger's thread from this post). Should I press them on the subject, or just take the money offered and be grateful?

All defined benefit schemes have a Cash Equivalent Transfer Value, although most schemes will only give you a guaranteed CETV once a year for free. The guarantee is usually for 3 months, and the charge for getting another within 12 months is usually a couple of hundred quid or so. (Snowbadger's case is not DB but a with-profits fund with the various twists that come with those.)

What you need is more information. Ask them what kind of pension is it, a copy of the scheme rules, and what your pension will be at various ages, with a breakdown of it, in particular what the Guaranteed Minimum Pension (GMP) amount will be, and the rates of increase both in deferment and in payment.

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Re: Utmost/Equitable

#420312

Postby Alaric » June 18th, 2021, 12:01 am

UncleEbenezer wrote:
More recently I've had contact from Utmost Life&Pensions, who now manage old accounts like mine.


Utmost took over the assets and liabilities of Equitable.
https://www.utmost.co.uk/

Equitable never completely failed, rather they were unable to deliver on their more extreme promises. Depending on how much went in during the 1980s, there should be a decent sum now available. Nothing spectacular, but if they guaranteed the funds to grow at least at 3.5% a year, they have been able to deliver more or less.

ursaminortaur
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Re: Utmost/Equitable

#420443

Postby ursaminortaur » June 18th, 2021, 11:54 am

UncleEbenezer wrote:Sometime in the 1980s, I opted out of a portion of my NI contributions, and paid them into the Equitable. Only the NI opt-out bit, and it wasn't for very long. When the Equitable collapsed, I mentally wrote it off.

More recently I've had contact from Utmost Life&Pensions, who now manage old accounts like mine. For an asset I'd written off, it comes as a very pleasant surprise to hear my pot with them is just over £100k. A surprise twice over: first because it's so much, second because it's a cash value at all: I had an idea Equitable worked with defined benefits - which was indeed why they got into trouble.

Is that right? How likely is it my pot should have a defined-benefit value they're reluctant to talk about (as per Snowbadger's thread from this post). Should I press them on the subject, or just take the money offered and be grateful?


As far as I am aware Equitable life mostly dealt with with-profits DC schemes with a few clients also investing in unit-linked DC schemes (ie DC funds directly invested in the stock market). I'm not aware that they had anything to do with managing DB* schemes. Their earlier with-profits schemes had guaranteed annuity rates (GARs) ie if you stuck with them until retirement and took out an annuity with them using your with-profits funds the annuity rate was guaranteed. These guarantees were what initially got Equitable into trouble as they couldn't be supported in the later lower interest environment. In 2001 Equitable produced a compromise deal which provided an uplift to policies in exchange for giving up the GARs which was accepted however the damage had been done and Equitable later had to be sold.

* Though they were involved in providing AVC's to some employer's DB schemes they didn't manage the DB schemes and the AVCs were, of course, themselves DC schemes.
Last edited by ursaminortaur on June 18th, 2021, 12:05 pm, edited 1 time in total.

Alaric
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Re: Utmost/Equitable

#420448

Postby Alaric » June 18th, 2021, 12:03 pm

ursaminortaur wrote: Their earlier with-profits schemes had guaranteed annuity rates ie if you stuck with them until retirement and took out an annuity with them using your with-profits funds the annuity rate was guaranteed. These guarantees were what initially got Equitable into trouble as they couldn't be supported in the later lower interest environment.


At some stage in the early 2000s, they had a vote of policyholders that agreed to abolish the guaranteed annuity rate clauses in the policies. If a policyholder is now offered £ X to use as a retirement benefit (buy an annuity/take as cash subject to tax/transfer to a SIPP etc) that's what it's worth.

ursaminortaur
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Re: Utmost/Equitable

#420451

Postby ursaminortaur » June 18th, 2021, 12:08 pm

Alaric wrote:
ursaminortaur wrote: Their earlier with-profits schemes had guaranteed annuity rates ie if you stuck with them until retirement and took out an annuity with them using your with-profits funds the annuity rate was guaranteed. These guarantees were what initially got Equitable into trouble as they couldn't be supported in the later lower interest environment.


At some stage in the early 2000s, they had a vote of policyholders that agreed to abolish the guaranteed annuity rate clauses in the policies. If a policyholder is now offered £ X to use as a retirement benefit (buy an annuity/take as cash subject to tax/transfer to a SIPP etc) that's what it's worth.


Thanks, Yes - you obviously posted whilst I was editing and adding that detail in myself.

UncleEbenezer
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Re: Utmost/Equitable

#420474

Postby UncleEbenezer » June 18th, 2021, 1:29 pm

Thanks. This post plus Alaric's followup answer my question fully. The cash pot is what I see: no mileage in poking around for alternatives, just in deciding what to do with it.

ursaminortaur wrote:
As far as I am aware Equitable life mostly dealt with with-profits DC schemes with a few clients also investing in unit-linked DC schemes (ie DC funds directly invested in the stock market). I'm not aware that they had anything to do with managing DB* schemes. Their earlier with-profits schemes had guaranteed annuity rates (GARs) ie if you stuck with them until retirement and took out an annuity with them using your with-profits funds the annuity rate was guaranteed.


Aha. That was my terminological confusion. The GAR is what I had expressed as a "defined benefit".


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