Recovery for Standard Life

Standard Life has revealed that it is well on the road to recovery. However, doubts still hang over who will benefit from next year's stock market flotation and how well endowment holders are being treated.

Figures published revealed worldwide sales of its investments are up by 4% to £619m, while sales at home are up 10% to £459m.

This is not a comfort to thousands of Standard Life endowment holders facing the prospect that their policies will not pay off the full balance of their mortgage, as many were led to believe. It was estimated, last year, that 600,000 of its 1.2m endowment policyholders faced a shortfall.

Standard Life revealed it was handling 1,000 complaints a week, and are expecting an increase due to the company's decision to impose 'time-barring'. This means people who feel they were mis-sold an endowment must put in a compensation claim by May 2006. They expect complaints to peak early next year and have a team of 200 staff dealing with the influx.

Standard Life state this is an industry wide problem. They feel the industry is being forced to satisfy regulatory demands (new accounting standards forced Standard Life to shift £7.5bn from shares into safer bonds last year) while trying to take action to help endowment holders.

On the positive side, at least 2.5m policyholders can look forward to a tidy windfall when the company floats on the stock market next year.

It is not yet clear how the free shares will be distributed, however, analysts expect a typical payout to be in the mid-hundreds of pounds rather than the £6,000 first estimated.

It has been hinted that an additional 4.5m policyholders who have joined in the post-Woollard years – and have, therefore, been forced to sign their windfall rights away – may be eligible for discounted shares at the float.

There is a suggestion that members whose policies will mature before the float may still be included. 'We have an objective to treat people fairly. In other demutualisation plans, statements have been made that people can reinstate their policy. I'm not saying we are going to do that, but that it what has been done before'.

Aug 26, 2005
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