Special report by Tara Fitzpatrick of STV News
Hundreds of Scots are believed to be affected by the collapse of Maiden LifeFörsäkrings’ Family Protection Plan (FPP) – a long-running credit union life insurance production now being wound up without compensation.
The plan, first launched in 1999 and withdrawn from sale in 2009, comes to an end on December 1.
With Maiden Life leaving the market, CMutual say no payout will be made to policyholders.
The sudden termination has erased decades of careful financial preparation for pensioners – who have branded the move “an injustice.”
‘We’ve been treated like we’re nothing’
A gran who says she has lost £8,000 in funeral cover after the insurer ditched its policy says she is “absolutely disgusted”.
Mary O’Neill, 75, says she and her family are “horrified” at the situation.
“I’m raging at what they’ve done. I feel as though we’ve been robbed.
“They’re off with our money and told us we’re not getting it back. How can that be right? Where has the money gone?”
Mary says her late husband, Tom, who was a founding member of the credit union, helped her take out the policy 25 years ago.
When he died, some of the value helped cover towards his funeral.
“He would be appalled if he knew what was going on,” she added. “My husband and I were both people who would be proud to pay for our funerals and not asked our children for anything. That money is gone now.
Mary, who has three children and five grandchildren, says many older people she knows are losing sleep over how they will afford their end-of-life costs.
“They don’t care what they do to vulnerable people. Because we’re pensioners, they probably think we won’t be there for that long. They treat us like we don’t exist.”
She is urging the government to step in and help the affected families.
“I’m hoping the powers that be will help us. I’m sure the other members would feel the same way
“It’s just awful. How would they like it if it were their mum and dad? Somebody needs to do something.”
Maiden Life leaves UK market
Maiden Life, the UK branch of Sweden-based Maiden Life Försäkrings AB, was appointed the insurer of the FPP in 2022 on a three-year contract.
In May 2024, Maiden Life informed CMutual, a specialist credit union intermediary which manages the policy, that its parent company was pulling all business from the UK.
This meant coverage for the FPP would end in May 2025.
According to Maiden Life, the termination date was extended on several occasions to allow for CMutual to identify another insurer to place the programme with.
A deadline of November 30 was agreed upon; however, an alternative insurer for FPP policyholders has not been identified.
‘They’ve walked away – they couldn’t care less’
STV NewsFor Anne McCaulay, the collapse of the plan has left her furious – and fearful about leaving costs to her family.
The 75-year-old gran paid in around £5,000 since 2000 – she says she took out the plan to spare her two sons the burden of funeral expenses.
“I didn’t want to leave the financial worry to them – that’s why I took it out. We paid into this for years – now it’s become evident that there is a huge problem.
“It’s come as a huge shock.”
Anne attended several tense meetings at Dalmuir Credit Union as the situation unfolded.
“The common feeling is that people feel utterly let down. You pay into this policy for years, and we’re not even getting any compensation.”
“We’ve been left with nothing. There’s no compensation. There was talk from about May onward when CMutual were supposed to be going away, looking at alternatives that might come up – but they didn’t. They were left free to go, ‘Oh well, there’s nothing we can do about it.’”
Ann fears she is now too old to secure affordable cover elsewhere.
“Who’s going to take you on at a reasonable cost now? There’s nothing out here. We feel abandoned.
“They’ve just walked away, and they couldn’t care less how it’ll pan out.”
STV NewsDumbarton Credit Union manager Stuart Boyd first received an email notifying them of CMutual’s plan to terminate the Family Protection Plan (FPP) in March. They were told by the insurance company that they would be looking at alternative products.
But he said none of the credit unions he spoke to were aware of the termination clause.
“None of the training material we received states there’s a 30-day term clause on the policy. The insurer didn’t make it clear to us. They say you pay your premium, and we cover you for that month, at a month’s notice. We were really shocked.”
He said the insurer first notified them that they were closing the books on the policy in 2009, though existing members would be allowed to continue, and they would honour those payments.
“That was 16 years ago. As far as we are concerned, they knew this wasn’t viable at that point in time. They never did anything to ensure the sustainability of it.”
In the wake of the plan’s collapse, Stuart says he has seen first-hand the devastation the news has caused pensioners.
“We’ve had a member, terminally ill, who asked, ‘So, it’ll be okay if I die before November 30, my family will be covered?’ The gravity of it is that people feel as if they don’t die before then, they’ve lost their money.
“We’re calling for the insurer to be held accountable, for them to provide funding for vulnerable members, and for the government to step in.”
‘People could be left empty-handed’
Many of those who hold the policy have been paying into it for more than 25 years; however, they are now at risk of being left “empty-handed,” according to MSP Paul Sweeney.
Sweeney wrote a letter to the Financial Conduct Authority at the end of last month, stating that constituents have been left “desperately scrambling” for a new policy.
An estimated 200 people across West Dunbartonshire have been impacted by the move.
Douglas McAllister, the constituency’s MP, says he has also raised the credit union’s policy termination with the FCA and is working with ministers to investigate alternatives for vulnerable members and push for compensation.
“I want to express my outrage and share the anger of my constituents across West Dunbartonshire, members of credit unions who have been paying into an FPP for decades,” he said. “Many have paid in thousands, some over £10,000 across three decades – and to be served with the news that these policies will be terminated is absolutely shocking.
“These are elderly and vulnerable constituents who will be left with no cover whatsoever. It’s an absolutely disgraceful decision.”
At First Minister’s Questions on October 30, John Swinney said he was “very sympathetic” to those impacted.
He confirmed that he would make a direct representation to the Financial Conduct Authority, along with the credit union working group.
The First Minister, left, said: “Credit unions provide an essential foundation in our society, particularly for people who are on low incomes and have low savings levels. It is important that financial security is available to them.”
Maiden Life commented: “In our dealings with CMutual, the interests of their clients and policyholders
have been foremost in our plans.
“As part of closing our life business, we ensured we gave CMutual considerable notice to enable them to inform and provide their customers with alternative arrangements.”
This photograph of office bearers was taken in Riverside Parish Church Hall on June 7, 1990, at the formal opening of Dumbarton Credit Union. Standing left to right. Deirdre Lynch, Tom O’Neill, Pat Tonner, Eileen Lally, Anna Trainer, Sister Anne Jane O’Rourke, Margaret Orr, Sarah Davis, Helen McGillen, Sally Connolly, Jock Findlay and Eamonn Cullen. Seated: Siobhan Kerr, Sandra Scott, Anindya Majumdar, Gregor Gordon, Barbara Croft, Carol McCafferty and Helen Devlin. Missing due to work commitments is Tommy Trainer who was also involved in a previous attempt to set up credit union in the West End.
By Bill Heaney looks back at the history of Dumbarton Credit Union
The following is what I wrote at the opening of the Dumbarton Credit Union office in High Street, after they moved out of Glencairn House which became unsuitable for their purposes.
A remarkable £22 million has been loaned to the 7000 members of Dumbarton Credit Union since the organisation was formed 25 years ago in 1990.
Large numbers of local people were struggling to obtain loans from banks and other financial institutions at that time.
It was even difficult to open a bank account which is essential for people to receive benefits or do almost any kind of business.
The CU was founded by a small group of like minded activists, including the Justice and Peace groups from local churches, who wished to provide a positive alternative to high interest loan companies and loan sharks.
It has now become a focal point for good and ethical banking facilities within the town and operates from new premises at 147 High Street, Dumbarton.
The membership has grown from just 27 members in 1990 to currently over 7000 adults and about 1500 junior account holders following a campaign in the schools to persuade young people to manage their money.
Those junior members who had accounts opened for them as toddlers and children have been able to transfer their accounts to adult membership and most have continued to save and as adults borrow from the credit union.
The services provided by Dumbarton Credit Union are varied and include savings, loans, free insurance and death benefits and have recently become available to internet users, with access available to all members. The website www.dumbartoncreditunion.org
Dumbarton man Pat Tonner, chairman of the Credit Union, is delighted with their success and proud of the work done by so many volunteers under his leadership.
He said: “We are especially pleased that the community has placed their trust in us to look after their hard-earned savings and that they come to us to borrow money when they need it.
“We provide a safe home for their savings and a sympathetic ear for ordinary working people and that is very important in these times of cutbacks and economic austerity.
“It is especially important to celebrate the excellent work that our credit union carries out over 25 successful years during which we have only once failed to make a profit.
“Ours is a not for profit organisation owned by all the members and we are looking to the future with a view to increasing the products and services we provide.
“Our members come to us at those important times in their life when they require extra money to see them through – times like births, deaths and marriages.
“We are also here to help them fund Christmas and holiday expenses and with money to assist them when they are moving house, buying furniture and decorating.”
The Credit Union stepped in when customers of the workplace “ménage” organisation Farepak encountered serious problems during the banking crisis.
Pat Tonner said: “Setting up the Credit Union wasn’t easy but we persevered and after a while, with the help of the late Rose Dorman and spirited others, we managed it.
“We are grateful to all those volunteers, some of whom continue to be volunteers today, and also to our staff who are there to make our members feel welcome and comfortable when they doing business here.
“Our watchword here is trust. Our members trust us with their savings and we trust them to repay what they borrow from the Union. That way we all benefit.”
He added: “We have had a steady growth of members over the years and we are now getting into second and third generations of members. The C U is an ethical banking alternative.
“Apart from favourable loans interest rates of 12.7% apr – that is just 6p in the pound per year – and a dividend on savings, currently 1.5% for adults and 4.0% for juniors we provide life insurance on savings and loan balances.
“Since 1990 almost £22,000,000 has been loaned to members. We have an adult membership of slightly over 7000 plus 1500 juniors.
“A Super Savers scheme is operating in a number of local schools and West Dunbartonshire Council have helped to encourage this by offering £10 to every pupil joining scheme.”
The CU is run by an annually elected Board of Directors.
Pat Tonner said: “We would hope to continue with well managed growth of membership and while in no way diminishing the personal touch which is a big feature of our operation, this growth would hopefully be accompanied by use of technology such as phone apps and so on.”