19 AUGUST 1995, Page 24


Eligible to receive a whinger's charter guess who pays the bill


Ihope that the Eligible Life will see me through. It is 172 years older than I am, but may be in better shape, and once a year it writes to me and cheers me up. Opening a letter from the Eligible out of season, I rather hope it may have declared an extra bonus. Not a bit of it: I have been sent a whinger's charter. Please fill in this pen- sions review form. (It goes on for four pages.) Please think back to when you took out your personal pension plan: was it before April 1988/since/can't remember? Did anyone give you advice? Can you remember who? You could be in for com- pensation. It may be important for you to complete the form, the Eligible says, even if you have now stopped your personal pen- sion plan, or if you feel you received good advice. So I must not write 'Carry on, chaps' across the form and send it back. I must not bin it either, or the Eligible will be obliged to send me two more forms. This survey has, of course, been wished on the Eligible by its regulators, concerned that some buyers of personal pensions got bad bargains seven years ago. (The regulators were looking in the wrong direction.) Every single bargain must now be reviewed. Who pays for this exercise? I do. Who would pay the compensation? I would. The Eligible is a mutual society and belongs to its policy- holders. I hope that when it sends out its next bonus declaration it will single out these costs and show what they have done to pension expectations. That will give us all something to whinge about.

In the midst of life

NO WONDER that some of the Eligible's competitors find that their new business is collapsing. The Foot In Door has lost its impetus. The Barchester is looking dises- tablished. Even the Consubstantial has seen better days. As for the Otiose Mutual, its salesmen now cost more money than they take in. It has joined the lengthening list of life offices whose policyholders would be better off if its staff were fired, its premises sold, and its funds invested in index-linked government stock. Someone will have to put it out of its misery. What has happened to the building societies is about to happen to the life offices. There are more of them than the traffic will bear, technology has opened up their market, and those with high costs and nothing in particular to offer must not expect to sur- vive. Their most rapidly rising cost these days will be the cost of regulation and com- pliance. The new business figures suggest that their customers would rather look for value somewhere else, such as the National Lottery. Rumours persist that the Lottery is to be brought within the scope of the Financial Services Act. Buying a ticket will then require best advice and will take an hour and a quarter, with a ten-day cooling- off period to follow, and, if your number does not come up, compensation.

Getting there from here

IF IT IS not asking too much, regulators and insurers and even Treasury ministers might now put their heads together. They can, I imagine, agree that if we do not pro- vide for ourselves, no one else is going to — least of all some future government. Any actuary or demographer could tell them that. They would then ask how we get from where we are to a system that fosters long- term savings, the foundation-stone of a suc- cessful and prosperous economy. They would at least be asking a sensible question.

Jolt from a judge

NOTHING IS certain in the law courts, as Mr Justice Evans-Lombe has now remind- ed me. I would have thought that if I bor- rowed money from my bank, against securi- ty, I could not sell the security without the bank's agreement. Any sensible manager, I would have thought, would keep my securi- ty in a tin box and sit on the lid. It is hard, though, to keep a house in a tin box, and Edward Barrett, who is under water on a mortgage from the Halifax, wanted to sell his. Go right ahead, said the judge — never mind the Halifax, this sale might be against its policy, but what did that matter? Now watch borrowers less scrupulous than Mr Barrett sell their mortgaged houses, pocket the cash and disappear into the under- growth. That prospect may at last jolt the mortgage lenders into using their atrophied brains. They cannot simply go on hoping that the waters will subside and allow their customers to surface. They have been hop- ing that for years, and the borrowers have been getting deeper in, with compound interest dragging them down. The lenders will have to bite on the bullet and recon- struct the financing. (One day they may have to do as much for Eurotunnel.) As owners, they would at least have some say about selling the house.

HMS Millenary

THE TIRELESS Bill Clarke, who was the Times's financial editor when I first infil- trated Printing House Square, is now try- ing to lure the royal yacht Britannia to Greenwich. There, when her sea-going days are over, she would still fly the White Ensign and serve as a floating version of Lancaster House. Business could use and support her, on suitable terms. This would be good news for the managers of the Mil- lennium Fund, who are looking in their laid-back way for somewhere to spend money. Greenwich now seems to be favourite. A perverse quirk of drafting means that they cannot buy the Queen a new yacht, useful and desirable as that would be, but they can finance the conser- vation of the old one. I hope that they can pay to tidy up the setting. They should pull down the derelict industrial buildings (were they power stations?) that frame the view of Greenwich Palace from the river. They could then improve the view from Greenwich Palace, by pulling down Canary Wharf.

Price sensitive information

MY MAN in the pokey tells me that Price Waterhouse have put up a notice in Ford prison. The accountants ask the inmates of this City out station to supply information on financial fraud, and offer them £100, to be paid to their favourite charity. Good try — but my man says that £100 would not suffice to get a fraudster out of bed at Ford, and that his favourite charity would be his offshore bank account.