View more on these topics

Underestimating endowment maturity figures

I too am dissatisfied with the current system of projecting endowment maturities (Letters, MM, July 31). The innate futility of attempting to shoehorn a guarantee, accrued annual bonuses, and a potential terminal bonus into a level growth projection of 4, 6 and 8 per cent is obvious.

This is compounded by companies such as Standard Life, Clerical Medical, Legal & General, Guardian and Scottish Equitable, which use the current surrender value as the basis for their projections.

Perhaps the blame lies with the FSA, which has failed to issue clear guidance on projection uniformity.

Thus, in addition to the above, we have Guardian and Scottish Provident refusing to include any notional terminal bonus within their projections – a trait also followed by Scottish Life with regard to its unitised with-profit projections.

In the mid-1980s companies were allowed to project the then current bonus rates, making for fanciful projections. Perversely, today we are in danger of deliberately underestimating these maturity figures. The additional amber and red letters received by policyholders will only add fuel to the compensation claims.

Alan Lakey

Highclere Financial Services, Hemel Hempstead, Hertfordshire

Recommended

Parents not saving for university costs – AITC

The Association of Investment Trust Companies&#39 latest research shows that 41 per cent of parents are not saving any money towards their children&#39s university education.

£3bn wasted on mortgages says HSBC

UK homeowners are being charged almost £3 billion over the odds by lenders with high standard variable rates, says HSBC. The bank dropped its Home Buyer Mortgage variable rate to 4.49 per cent last week, and says that 7 out of the country’s top 10 lenders charge their customers at least £14,000 more than its […]

Pensions Ombudsman overwhelmed by complaints

The Pensions Ombudsman is struggling to cope with its workload as complaints soared by 32 per cent to 3,891 in the year to April 2003 from 2,946 the previous year.Pensions Ombudsman David Laverick has expressed concern over the increased workload his office is being asked to deal with and is calling for clearer rules governing […]

The joy of stakes

I set up a stakeholder pension scheme for my staff in April 2001. I do not make any employer contributions to the scheme and take-up has been extremely low so far. Can you offer me some guidance for encouraging more employees to join the pension? First, you are not alone in your situation. A large […]

Directors, limited liability partners and auto-enrolment

By Jim Grant, Senior Product Insight & Technical Support Analyst 6 April 2016 brought in changes to employer duties for directors and partners in limited liability partnerships. Here we explain exactly what’s changed. Before 6 April 2016… Directors of limited liability companies where there were no other directors or employees were exempt from the employer […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com