HENRY would not be impressed. The dapper chap with everyone's best interests at heart would think the latest twist in the Equitable Life saga beyond the pale.

Henry was the star of many an Equitable Life television advert extolling the virtues of saving for retirement.

Where better to place one's money than in the assured hands of the world's oldest mutual life insurer?

For 230 years, Equitable Life was at the vanguard of the savings industry.

Now, aged 242, it lists like a sinking ship, leaking the carefully accrued money of hard-working people the length and breadth of Great Britain.

Its hands have proven anything but assured, and equitable it certainly was not.

History will show that Equitable Life was neither fair nor just in its treatment of more than a million policyholders.

Despite a decade of publicity about the troubles at the mutual, the root of Equitable's problem lies nearly half a century in the past.

For it was almost 50 years ago that the insurer first launched its Guaranteed Annuity Policies.

GARs were designed to give investors a guaranteed minimum income when they retired and were seen as reassurance for those looking to save beyond the minimum state pension.

For a long time they were a successful savings tool. But demographics, economics and sheer foolishness on the part of certain managers was to be their undoing.

During the 1970s and 1980s, the masters of the Equitable ship put their faith in higher interest rates and set the guaranteed return at a generously high level.

As those interest rates tumbled in the ensuing years and the life expectancy of policyholders increased, that policy was doomed to failure. Equitable owed policy returns its coffers could never hope to honour.

The first anyone knew of the problem was when the company approached GAR policyholders asking them to accept a cut in bonuses or surrender their guaranteed annuity rates.

Records would later show that as far back as 1993 the company could no longer honour promises to pay the minimum rates.

A year later, and Equitable was begging the Department for Trade and Industry to allow it to underpin its solvency levels with future profits - a robbing Peter to pay Paul position that threatened the savings of all of its members.

The folly of past decisions finally hit home in the late 1990s as an increasingly cash-strapped Equitable turned to the courts in a vain attempt to override its members' decision to resist bonus cuts.

Legal battles took up time, and considerable sums of money, but eventually, in summer 2000, the Law Lords gave the insurer an inkling of what was to come when they ruled Equitable's attempts to avoid paying guaranteed annuity rights were illegal.

The mutual society was left with a liability of £1.5bn and put itself up for sale.

Despite reported interest from up to ten different companies, including the UK's biggest life assurance company Prudential, no firm bids reached the table.

Having failed to find a buyer, Equitable was forced to close to new business in December 2000.

A year later, Lord Penrose was asked by the Treasury to investigate the mutual's troubled history.

A new management structure has moved the remaining fund of £11.5bn into bonds to protect it from insolvency.

About 800,000 policyholders had instead pinned their remaining hopes on the Penrose Report, praying it would give them the weapons to fight the Government for compensation.

With that route seemingly closed, there are few avenues of hope left for the hard-working people who fell for the charms of Henry.