Aviva puts saga of inherited estates to bed in 470m deal

AVIVA said it will hand out a &pound;470m windfall to around 805,000 policyholders that invested in two of its with-profits funds by Christmas.<br /><br />The special payout comes from inherited estates built up by the funds &ndash; pots of money that were hoarded in boom markets to protect against market downturns.<br /><br />The reattribution of the inherited estates comes after the policyholders voted in favour of Aviva&rsquo;s &pound;470m offer in return for giving up their rights to the funds.<br /><br />Aviva chief executive Mark Hodges confirmed the final deal yesterday, saying around 87 per cent of the savers voted and 96 per cent chose to share in the payout.<br /><br />Divvying up the &pound;1.25bn of spare cash has proved hugely controversial for Aviva, with many arguing the offer was too low.<br /><br />David Trenner, technical director of Intelligent Pensions, yesterday called the plans Aviva&rsquo;s &ldquo;policyholder rip-off&rdquo;. &ldquo;Let&rsquo;s be clear about this. Shareholders are getting money that should go to policyholders,&rdquo; he said.<br /><br />He said City watchdog the Financial Services Authority allowed the deal that will bring an end to interest in with-profits funds altogether.<br /><br />&ldquo;It is difficult to see any adviser recommending with profits in future when it is clear that the only people to profit from these funds will be shareholders,&rdquo; he added. Most policyholders being offered between &pound;214 and &pound;1,230 to end any future claim to a share of surplus money in the funds that hold their investments.