Excellent article in the Eye this morning on the high court win for Prudential policyholders.
The article points out that, rather than backing the annuities in safe assets, Rothesay does something a bit riskier
Among its assets are equity release mortgages, which depend largely on the housing market behaving itself, and, since 2015, a sizeable volume of loans to companies ultimately owned by property tycoon Vincent Tchenguiz. These in turn have put the money into portfolios of ground rents, the controversial annual fees paid by leaseholders to freeholders.
But, as it goes on to say, ‘Rothesay’s income is far from guaranteed, the assumed profit far from certain’, ending on the note, as we posted here, that the accountancy regulator (the FRC) has announced a review of the rules for valuation of equity release. “Pensioners whose incomes are backed by questionable ground rent portfolios ought to hope for something similar”.
(But don’t hold your breath).