Equitable Life hikes fees for 77,000 customers

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Failed insurer Equitable Life has hiked fees for around 77,000 pension customers by up to 50 per cent in some cases.

The firm, which nearly collapsed and closed to new investors in 2000, says the increase in charges is necessary because as policies mature fees are no longer covering the cost of running the business.

An Equitable Life spokesman says: “We’ve informed the affected policyholders and charges have not gone up for 20 years. Customers will be moved to the funds that are closest to the ones they are in at the moment.”

Around 77,000 people with unit-linked policies will be affected with some seeing rises up to 50 per cent. Equitable Life would not give an average increase or a breakdown of the impact on different groups of customers.

For instance, investors in the old Clerical Medical Adventurous, Balanced or Cautious funds will be moved into the Managed funds and will pay annual management charges of 0.75 per cent, up from 0.5 per cent currently.

Likewise, those in the old Deposit Fund, which had no annual charges, will find their money moved to the Money Fund with a 0.5 per cent charge.

Savers can pick a different fund or move their money to another provider.

It is also closing some of the 107 funds it runs and moving policyholders’ money into alternative funds.

In March 2015 the insurer transferred its £875m annuity book to Canada Life.