Judge backs Aviva fund payout

18th Sep 2009 15:52

A High Court judge has scuppered an attempt to stop insurer Aviva paying £500m to policyholders in two of its with-profits funds.The decision to back the move means one million savers will get between £200 and £1,000 each, although a small group of policyholders had opposed the plan.They complained that the payouts are just half the amount that would've been paid before the financial crisis. Consumer group Which? called it 'derisory'.But Mr Justice Norris approved the offer after a three-day hearing in London, paving the way for most payments to be made by the end of the year.The 'reattribution' of Aviva's 'inherited estate' means policyholders can accept money to give up any claim to the surplus cash in the funds.'Today's decision by the High Court is an important step towards completing the reattribution," said Mark Hodges, chief executive, Aviva UK Life. 'We believe the offer represents good value for 99% of our customers and the High Court's approval brings individuals closer to receiving their tax-free payments.'About 34,000 savers have so far opposed the scheme. They'll retain a theoretical right to a future dispersals, but Aviva doesn't think there'll be any payout.'This is a sad day for consumers - once again they've lost out to a system that is pitted against them,' said Which? policy adviser, Dominic Lindley. 'Weak FSA regulation and a lack of legal protection, has lost policyholders millions of pounds. We need a fundamental change to the rules companies must follow, to stop what we believe is akin to daylight robbery, happening again.'Most of the 850,000 who've voted were in favour of the move.