UK - Beleaguered insurer Equitable Life is on the brink of insolvency.
The firm – which has cut payments to its with-profits annuitants – has warned that it may fail the Financial Services Authority’s minimum solvency test.
Around 50,000 annuity holders at the beleaguered insurer have been told that their pension payments will be cut by up to 30% next year.
The firm added that it may have to default on payments to its bond holders, who are owed £300m, as its free reserves have fallen from £1.1bn to just £400m.
Hargreaves Lansdown pensions development manager Tom McPhail said the sole concern of Equitable policyholders was in getting the money that they are due and winding up the society to protect them from further losses.
He explained: “Equitable has reached the end stage – it is close to insolvency.
“It will be messy and expensive, but it would be preferable if it was wound up voluntarily in a dignified manner.”
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