Updated 21st November 2014
EMAG's new film: “Time for the Treasury to settle its Debts”
EMAG recently filmed a dozen of its aggrieved non-annuitant members
“My schoolboy error was to invest in a pension.
…About 40 years or so ago, when I started earning decent money, my accountant asked if I had a pension fund. I don't look for advice from my accountant and certainly not from any financial advisers. Have you met any of them? Well then.
He pointed out that there was a tax advantage in paying into my own pension pot, but it was up to me. I did the figures on the back of an envelope, trying to work it out. There was a tax advantage on the contribution, but what if I kept all the money, paid the tax, then invested it myself — bought a flat, say, or some Penny Blacks — would I not be just as well off?
The accountant and all the clever-clogs I spoke to shook their heads at my stupidity. They explained that when I came to take the money from my pot, which would grow all the time, I would get 25% tax-free and the rest would buy an annuity — a pension for life. How good was that? The government clearly wanted you to do it, and had structured the laws accordingly. So, at the end of every tax year, I used to put away a large sum. It was a few years before I realised that once you had contributed to your pension pot, it was gone, no longer in your hands. I also hadn't realised that your annuity, when you took it, would be taxed. And when you died, anything left would belong to them, not you. My own stupid fault: starting it without fully understanding it…
The Equitable had been going since 1762, had bishops and ambassadors among its 1.5m customers, so must surely be totally reliable. I had policies described as “with-profits”, wording I wasn't really clear about, but the nice suits explained that highs and lows would be evened out so I would always be sure of a steady return.
Then one day, at the end of 2000, I heard the dreadful news. Equitable had run out of money and hit the rocks because it couldn't pay the promised annuities. There was confusion for a couple of years, then it emerged that the Prudential had taken over my annuities — but each year they went down by about 20%!
I suppose that between us — for I put money in for my wife as well, saying “sign here, pet” — we had invested several hundred thousand pounds in the Equitable over 30 years. In the past year or so, we have had about £10,000 in compensation for the reduced annuities. This year, our annuities seem finally to have stabilised.
I have drawn out a lot, by starting early, so I was luckier than some. But really, what a mistake. At least we are still working. Think of all the poor sods with no other income who planned to rely on the Equitable for their retirement years…
None of our three children has a pension fund, partly because they are self-employed. One is a writer, one is a barrister, one is a designer. They have never had enough spare money, but partly I suspect it is because they have heard me moaning on about my pensions…”
UK politics “kippered”, again
On 20th November UKIP saw its second MP elected to the Commons in the Rochester & Stroud constituency. It is no exaggeration to say that the UKIP factor is destabilising the status quo and giving every sign that it will cause far more seats than is normal in a general election possibly changes party representation in May.
EMAG's 14th AGM was held in London on 19th November. Attendance was double last year's at over 100 members present. All of the existing seven board directors were re-elected and it was announced that Alex Henney is standing down as chair and is now replaced by Betty McCann - congratulations to both. The keynote speaker was Equitable Life's chief executive, Chris Wiscarson. He delivered a thoughtful insight into his own political perspective. And he observed that whatever success EMAG may achieve on compensation, it will also benefit the vast majority of his existing 360,000 ongoing policyholders.
APPG 10th November
A well-attended APPG meeting (and the group's) AGM was held in the Commons on 10 November saw 30 MPs and researcher representatives hold a Q & A session with the new minister at The Treasury responsible for Equitable Life compensation, Andrea Leadsom (Conservative MP for South Northants). She stayed on-script with the oft-repeated official government mantra. She did however agree to meet EMAG directors. The Exec of the APPG will be writing a follow up letter to the minister to challenge some of Mrs Leadsom's assertions.
The APPG minutes can be found here: APPGminutes10Nov14.pdf
EMAG's rally 22nd October
EMAG's third Westminster Rally and Demo took place in fine weather and it was a huge success. There were 350 seats in the Central Hall Westminster and barely an empty chair. EMAG members heard an inspiring speech by EMAG's President Honor Blackman. She was followed by stirring contributions from five backbench MPs and a message from Natascha Engel MP was read out by EMAG's Paul Braithwaite.
Thereafter, the majority of members present donned Tee-shirts and adjourned to outside the Commons for a photograph with Honor and the joint chairmen of the APPG, Bob Blackman MP and Fabian Hamilton MP. Afterwards, dozens of members sought to lobby their MPs. Paul Weir, EMAG's communications director, is to be congratulated on excellent organisation. See: Rally_Press_22-10-14.pdf