The British High Court ruled in favour of Equitable Life yesterday in a key annuities case, easing what some analysts said was a threat to the survival of Britain's oldest life and pensions mutual.

Other life and pensions groups and the gilt markets had been watching the case closely, as a ruling against Equitable Life, in a case over its treatment of guaranteed annuity policyholders, was seen as sparking market volatility.

"The society's decisions regarding final bonus were not in breach of any contractual rights of the policyholders," Lord Justice Scott said in his ruling.

Gilt markets had expected that, if the company lost the case, forcing it to pay the policyholders more than it wanted, it and its peers would have been obliged to buy large amounts of long-dated gilts or other bonds to cover their liabilities.