The 10 per cent reduction in maturity values imposed last year is a permanent fixture, as is the 20 per cent exit penalty on early surrenders. This means the MVA is now classed as an 11.1 per cent cut, from the new standardised 90 per cent maturity value.”Equitable did give the impression the 10 per cent cut, and the market value adjustment, were temporary measures,” Tom McPhail, of Hargreaves Lansdown, says. “But they have been crystallised, and this does shift the landscape against policyholders.” He believes the presentation of the numbers gives Equitable scope to cut payouts further.The news on bonuses, though non-guaranteed, is the best policyholders could have hoped for. Guaranteed annuity policyholders whose policies matured before the Lords ruling have also been in line to restore their benefits. This too has hit hard ground, and the scheme Equitable had been employing is being stopped and is to be replaced by an as yet unknown one.Some IFAs believe the sudden brick wall on policyholder compensation, is an ominous sign that Equitable is having difficulties finding the cash to pay policyholders. “There is now the concern that the money set aside for compensation may not be enough,” Mr Turton says.Brian Dennehy, at Dennehy Weller, is concerned for holders of income drawdown pensions, policies that are a stop-gap between retiring and buying an annuity at 75 for those who want to keep their fund invested.

Equitable has been reviewing the cases of people who bought these policies to establish if they were mis-sold, but Mr Dennehy believes many policyholders still do not know whether they qualify for redress.Equitable has said provisions for compensation are an area of concern, and although they believe they have set aside appropriate funds, “significant uncertainties” remain.. Pension savers who believe they are on track for a comfortable retirement are in for a rude awakening next week, when new annual statements will set out in black and white the real value of their pension. The Government has forced pension providers to provide standard and simple illustrations of the benefits people can expect when they retire.Increasing numbers of companies are closing final-salary schemes, which promise a pension based on years in service and earnings. Instead, employees are being offered defined-contribution plans, where the pension is entirely dependent on the amount contributed and the performance of the stock market.In the new annual statements, anyone with a defined-contribution company pension, personal, or stakeholder one will have a clearer picture of their retirement income. Even if you have stopped contributing to a plan you will still receive a new-style statement.Pension providers take the amount invested so far, include future contributions and work out what the final pension is likely to be.

They use three sets of assumptions about the growth of the stock market: a cautious 5 per cent, a middling 7 per cent and an optimistic 9 per cent.The statements from your pension company will value policies in terms of today’s money, accounting for the effect of inflation in the figures. For example, an illustration from Legal & General, the pension company, for a 32-year-old paying £215 a month until retirement at 60 will show a final nest egg of £203,000, using the middle rate growth assumption of 7 per cent. This will buy a retirement income of £8,270 a year.Using the new way of illustrating a pension, the same person will be told their pension pot will buy them an annual income of only £4,990 But this does not mean the fund is worth less in real terms. It demonstrates the future purchasing power of the pension because the figures are shown in today’s money. For the first time, consumers will be able to see how inflation between now and at retirement could reduce the buying power of a pension pot.The average amount of money a retired couple spend on groceries each week is £61.35, Age Concern says. If you take inflation into account, in 20 years this figure is more likely to be £100.