The thorny problem of Equitable's guaranteed annuity liabilities has still to be tackled despite the Halifax deal for the salesforce, admin and fund management.
Halifax will pay a further £250m to Equitable if policyholders reach an agreement but it will not be involved in working out a compromise. Equitable will be battling it out alone to structure a deal that will convince policyholders to give up their guarantees in return for a one-off policy bonus.
Annuity Direct managing director and Equitable Life Guaranteed Annuity Policyholder Action Group leader Stuart Bayliss says: “The most important problem has not been resolved. It is unlikely policyholders will accept a compromise that in any way tries to negate the Lords' decision. But a compromise within the decision can easily be constructed to meet policyholder approval.”
Income Drawdown Advisory Bureau director Ronnie Lymburn says: “I do not think this is as good news as Halifax and Equitable make out. They could be raising policyholders' expectations only to dash them yet again.”