As Equitable points out, annuity holders have been left until last, and the cuts are being made because they simply can’t be avoided any longer. This is the clearest signal yet that the insurer is teetering on the brink of collapse.Ordinary with-profits policyholders who could leave Equitable if they swallowed the exit penalty should think about doing so. If the situation gets worse, and there are no signs that it will improve, their plans could be slashed still further.For those who are about to purchase an annuity, the advice is to shop around. Equitable’s woes were partly caused by the prolonged depression of the stock market, which couldn’t have been predicted. But seeing as you can’t get away with not buying an annuity after the age of 75, you must do as much as you can to protect yourself by not automatically purchasing an annuity from your pension provider. See what else is out there before committing your financial future, or you might regret it.

m.bien independent.co.uk. Persuading people to invest in shares in this investment climate is well nigh impossible. Yet this is not preventing venture capital trusts (VCTs) trying to attract new investors. Seven VCTs are open at the moment, even though demand has slumped in the past 18 months. In the 1990s, VCTs were a tax-efficient home for investors’ money, culminating in £440m flowing into the trusts last year. But this year they attracted just £140m and some predict that next year, inflows could be as low as £50m. As a result, Gartmore and Pathway One have withdrawn VCTs that failed to raise enough money to meet their targets.VCTs are not for the faint-hearted.

They are investment trusts listed on the London Stock Exchange, investing in start-up ventures, unquoted firms or companies on the Alternative Investment Market (AIM). Investors can choose between generalist VCTs, which invest most of their portfolio in unquoted companies; specialists in a particular sector, such as technology; or trusts focusing on AIM companies. VCTs are limited to buying stakes worth less than £1m or to investing up to 15 per cent of the fund in individual companies with a total capitalisation of no more than £15m.VCTs were particularly popular during the stock market boom in the 1990s because they allow investors to defer capital gains tax on up to £100,000 of their profits from equities each year. Investors also receive an upfront 20 per cent reduction of their income tax bill in the year they invest, while gains on the sale of shares and dividends are tax-free.But given that the stock market has fallen in value by 40 per cent within two and a half years, such tax benefits have become less important, if not redundant, and greater focus has been placed on likely investment returns from VCTs.Unfortunately, it can be difficult to value the underlying investments, as most VCTs are unlisted companies. Of the 64 monitored by the website Tax Efficient Review, it is estimated that 14 have delivered a positive return since they were launched seven years ago. The largest estimated gains have been 22.81 per cent by Foresight Technology since November 1997 and 15.51 per cent by Oxford Technology 2 since April 2000.Any gains are distributed tax free to investors in the form of dividends.