20 Years ago I had £11k which I had accumulated by contributing to AVCs. I researched the market and bought an annuity with Equitable Life and they paid me just over £100 a month. Then they ceased to trade and their annuity business was taken over by Prudential and the income immediately dropped to about £70 a month.
I have just had my annual statement and am amazed to learn that my annual income is to reduce from £673 to £644. Bearing in mind they they are investing for profit AND they are repaying me part of my capital sum, over the years, and that I am getting 3% interest on my current banking account I think this return on money is pathetic!
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you are getting 3% pa on a current bank account? thats amazingly good, what bank/account is that?
Oh and your ex EL money? you are lucky you got anything - the place was run by crooks and fools.
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You should get one Z - It is a Santander ZERO account LOL! It pays 3%, less tax, on deposits over £5000. This is more than I getting on a cash ISA FFS!
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The best of luck with Santander! After witnessing their customer handling skills during an enforced* 60minute visit to a branch I swore I would NEVER go near them again. Approximately 50% of the visiting customers were dissatisfied - I would have closed the account on the spot if I had had a similar experience.
*I had a local account that was taken over by them, and had to drive 7 miles to sort the mess in person. Telephone support was laughable.
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Are you entitled to compensation ?
equitablelifepaymentscheme.independent.gov.uk/
Last edited by: R.P. on Sun 4 Aug 13 at 10:48
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Thanks Rob! I am getting some compo but it is so small and spread over so many years I had forgotten about it. ISTR that the Government were found to have been grossly negligent in their oversight and regulation of EL and were ordered to pay compo but has set it at about 30% of the actual loss sustained.
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I use Santander, on line, to take my payments in and deal with my outgoings and that is it! I have a very small town local branch and they are helpful and the one time I have had to talk to customer service about a missing debit they dealt with it promptly. I hear the bad comments but they don't reflect my experience so I stay put. I was tempted by Halifax, £100 when you switch and £5 a month if you pay in over £1000 a month
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I think you will find that the Zero account. Is no longer available and is paying existing customers 1 per cent after first year.
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Thanks CGN - I will check. Anything is better than the negative return from the Pru!
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Try the 123 account with Santander. £2 per month but pays cash back on some direct debits. I get about £15 per month from them.
Also it pays interest at 3% on everything above £3k and below £20k.
All call centres are now in the UK which makes a huge difference.
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>> Try the 123 account with Santander. £2 per month but pays cash back on some
>> direct debits. I get about £15 per month from them.
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>> Also it pays interest at 3% on everything above £3k and below £20k.
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>> All call centres are now in the UK which makes a huge difference.
I was looking at this. YOu need to put 1k in, pay 500 in a month and have two DD paying out a month to qualify.
I was pondering opening one up, putting in 10k, setting uo a standing order to pay in 500 a month, and transferring a few DD's to take out 500 a month. BUt then after tax you get about the same as a cash tax free ISA
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I mentioned the Santander 123 account on here 3 or 4 months ago but, in the end, decided not to go with it as I'd have to forgo our current account with free (European) travel insurance. The benefits associated with the 123 account and its tributaries looked very good for me but knowing Santander they will be dropping the rates once they have accumulated enough takers and persuaded me to give up the travel insurance. IIRC there are fees with the 123 account, so the balance of the equation will be moved to Santander's favour when they drop interest rates.
Remember, Santander are to banking what Ryanair are to air travel.
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Well, there ya go! I've just received notification from Santander that they will be terminating all (Premier) current accounts with free travel insurance in autumn 2014. Maybe it's time to re-assess the 123 account ..............
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I stick with my current account, now not one that is available to new customers, as I get a very good exchange rate when drawing cash out of ATMs abroad and no fees charged by Santander
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Just looking at those figures again Meldrew and wondering have your really done that badly. You paid £11k for a an annuity which initially paid out £100 per month i.e @1,100 per annum. Your are now getting around £650 p.a. Let's say £800 per annum on average.
You have therefore paid in £11,000 and received £16,000 and will still receive £644 per annum for the rest of your life which I hope is a long one.
You are also receiving some compensation from the government.
Overall could be worse!
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Perhaps I have been both hasty and simplistic, a bad combination! I had overlooked the compensation but my overall reaction was that income halving over 20 years and getting lower year by year doesn't look too clever for a "with profits|" financial instrument. The sum still pays my monthly heat and light, for the moment!
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>> Perhaps I have been both hasty and simplistic, a bad combination! I had overlooked the
>> compensation but my overall reaction was that income halving over 20 years and getting lower
>> year by year doesn't look too clever for a "with profits|" financial instrument. The sum
>> still pays my monthly heat and light, for the moment!
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Yes it must be dispiriting to see it go down.
"With profits" policies of all kinds have declined in returns. They are also "smoothed" and were they not, you would have seen much greater volatility.
I put £20,000 into AVCs in the Pru's with profits fund in about 1993-4. This year when I took the related pension the AVC had reached just under £51k in value, an annual return of just under 5%, which is at the high end of with profits returns for the period. Most if not all insurers did worse than Prudential.
Had I taken level annuity with the whole £51k, I would have got about £1000 a year with limited RPI rises, or about £2000 a year level. That's why I used as much of the AVC as I could for the tax free lump sum.
There a piece here from the DT about with-profits returns declining.
goo.gl/LEK957
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Doesn't sound too bad to me.
The whole point of a with profits annuity is that it can be variable in what it pays out, and yours has done quite well.
I have just been obliged to buy an annuity with £6200 approx of Avc surplus - I used the rest to take a lump sum. Based on market rates, the pension fund offered me £126 A YEAR with limited RPI. Increases and a 50% spouse pension. As this would be of negligible use anyway I did the best I could with it and bought a level annuity of £250 a year with 100% spouse pension.
You have done a lot better than that.
Last edited by: Manatee on Sun 4 Aug 13 at 16:31
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I have a guaranteed rate annuity from Equitable. (The deal which effectively broke 'em). :-)
I just wish I had put more into it when I could, as the sum invested brings in only around £750 p.a.
No reductions for me!
I've just changed to First Direct, via a Money Saving Expert link, for the special £125 joining bung. I due course I will become "dissatisfied" and leave for the special £125 "not happy" bung. I will probably go to Halifax for their joining bung and eventually revert back to HSBC, which account I have kept open with about 50 notes in it. (I like their internet banking!)
Play the bludgers at their own game, I say.
I've successfully used a 0% interest balance transfer CC to buy a three piece suite & a new TV, paying off the balance before interest accrued.
I've just been OK'd for a Tesco CC with a very long 0% on purchases, in case I do decide to buy another car.
Current borrowings £0.
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>> I have a guaranteed rate annuity from Equitable. (The deal which effectively broke 'em). :-)
Only you could grin because you profited out of everyone else's misfortune in EL.
Last edited by: Zero on Sun 4 Aug 13 at 19:27
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I too had an annuity with EL, now Prudential. It is however an oddity and not from an EL disaster-struck fund, so it is unaffected.
The downside is that I started on AVCs very late in the day. That and early retirement mean I get only £33.48 a year from them. That makes £2.19 a month after tax. I asked the Pru to make a yearly payment but they wouldn't.
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>> That makes £2.19 a month after tax.
£2.23, surely?
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£2.19 is what the paperwork says and what I get. Maybe this fund is problematical after all but the amount is too small to be worth delving any deeper.
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With Profits Annuity - Very Bad Joke! - Zero
