View more on these topics

Widows goes into gobbledegook to slash payouts

IFAs are accusing Scottish Widows of going against the spirit of the Raising Standards initiative with its “opaque” with-profits bonus declaration which sees many payouts cut by up to 22 per cent and others getting no terminal bonus.

Widows, a front-runner in the ABI initiative which extols the virtues of plain English, has been attacked for the cryptic presentation of its bonus declaration and using terms such as “rate of price increase” to describe the cuts.

A Widows spokesman claims it does not fall foul of Raising Standards by using such terminology. It would not confirm if such phrases would be used in policyholders&#39 annual statements.

The cuts could lead to terminal bonuses being wiped out altogether on some contracts and will see reversionary bonuses on pensions cut by 12-22 per cent and 12-18 per cent on endowments.

The maturity value on a 25-year £50-a-month endowment sinks to £59,762 from £74,627 last year.

Widows deputy actuary Kevin Doerr says: “I expect it to be the case that some terminal bonuses will be lost. It is a sign that guaranteed benefits are biting in.”

Pensions Protection Investigation Accreditation Board chief executive John Cox says: “We encourage the use of plain English but do not require it across the board. This might be an area that we look into in the future.”

Syndaxi principal Robert Reid says: “With-profits is opaque enough without companies using actuarial language.”

Recommended

Comply with me

In the next year, all brokers will need to make key decisions about how to face up to the demands of regulation in 2004.Any sensible intermediary will give him or herself at least six months to bed down new systems and practices before regulation makes them compulsory. Decisions will need to be made this side […]

FSA opens the box To depolarisation

The FSA has called last orders on polarisation, opening up distribution of financial services and opening itself up to claims of massive consumer detriment with a box-ticking disclosure regime in one fell swoop.FSA consultation paper 166: Reforming Polarisation: Removing the Barriers to Choice, published this week, creates any number of distribution models and allows hybrid […]

FSA says proposals won&#39t spark IFA shift to multi-ties

The FSA is predicting that very few, if any, IFAs will decide to go multi-tied as a result of its proposals in CP166.Although not providing any further details on numbers, head of retail projects David Severn says the regulator&#39s research shows that most IFAs want to retain their independence, with most multi-ties likely to come […]

Giving up the lion&#39s share

The Diary has learnt from a disgruntled group of Antipodian backpackers that they were forced to share their youth hostel dormitory with a family of five from Bristol visiting London for the weekend.We understand that the daddy was none other than Hargreaves Lansdown&#39s ubiquitous pension spokesman Tom McPhail together with his girlfriend and their children […]

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