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&#39No penalties for Equitable clients&#39

Retirement specialist IFA Wentworth Rose says it has obtained a statement for its Equitable Life policyholding clients confirming they will not be penalised for drawing an income or transferring their funds.

Equitable introduced a 20 per cent terminal bonus penalty in a bid to protect its with-profits fund from mass transfers shortly after its House of Lords defeat on guaranteed annuity rates.

The imposition of the 20 per cent market value adjuster provoked fears pensioners who needed to start drawing an income from their plans would be penalised, particularly if they exercised their right to transfer their funds.

The IFA says it has proved difficult to get clarity from the life office on its treatment of those taking benefits.

It says policyholders wanting to draw an income have received written confirmation they will not be penalised.

Wentworth Rose managing director Philip Rose says: “This is very good news for those Equitable Life policyholders who need to start drawing an annuity income or using income drawdown.”

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