Financial Statements
Notes to the consolidated accounts
35. Provisions
| Analysis of total provisions | 2007 £m |
2006 £m |
|---|---|---|
| Pension deficits (note 10) | 27 | 77 |
| Other provisions | 119 | 138 |
| 146 | 215 |
| Analysis of other provisions | Review of mortgage endowment sales £m |
Future consideration £m |
Other £m |
Total £m |
|---|---|---|---|---|
| At 1 January 2007 | 20 | 75 | 43 | 138 |
| Charged in the year | 4 | - | 24 | 28 |
| Acquisition of subsidiaries | 21 | (58) | 36 | (1) |
| Released in the year | (2) | - | (1) | (3) |
| Utilised in the year | (17) | - | (26) | (43) |
| At 31 December 2007 | 26 | 17 | 76 | 119 |
Included in the carrying amount above, £45m (2006: £31m) is expected to be settled more than 12 months after the balance sheet date.
(a) Review of mortgage endowment sales
Provision has been established for the estimated likely cost of redress, including administrative costs, arising from the review of the suitability of mortgage endowment policies. In addition to the accounting provision of £26m (2006: £20m), an actuarial reserve of £9m (2006: £17m) was held in the insurance contracts provision of FPLP's With-Profits Fund in respect of estimated further complaints.
The majority of the mortgage endowment redress provision is expected to be settled in the next 12 months.
(b) Future consideration
Provision has been established for the estimated future consideration payable on acquisition of Pantheon Financial Limited and Quadrant Caldwell Drake Limited, further details of acquisitions are shown in note 42.
(c) Other
Other provisions consist of £12m (2006: £14m) in respect of vacant properties, £8m (2006: £9m) in respect of potential claims on share entitlements not claimed following demutualisation, £1m (2006: £3m) in respect of the estimated likely cost of redress arising from a review of other sales, £4m in respect of irrecoverable VAT on Investment Trust management fees (2006: £nil), lapse provisions within Sesame £25m (2006: £nil) and other £26m (2006: £17m). In addition to the accounting provision in respect of other sales, an actuarial reserve of £1m (2006: £23m) is held within insurance contract liabilities.