The link between the O2 Arena’s Indigo Room — usually used as the after-show venue for visiting artists such as Prince — and thousands of older savers isn’t immediately obvious, but the future of their retirement savings is pinned on what happened in that room on Friday.

It was the venue for an angry meeting between Lehman Brothers International Europe, the bankrupt investment bank, and its creditors, which include most of London’s mutual and hedge-fund managers.

It had been billed as a corporate stand-off, but, while the hedge funders traded blows, thousands of ordinary savers were waiting anxiously to discover what would happen to their hard-earned savings.

Most of them didn’t even know they were tied up with the fate of Lehmans, one of America’s most arrogant investment banks. Take one of its creditors, Arc Capital & Income.

It has hundreds of clients in four so-called structured products. One of them, the Fixed Income Plan 7, was designed to provide monthly payments but they have been suspended since Lehmans’ collapse in September; the others were designed to provide growth, the capital backed by Lehmans through derivatives contracts.

Price Waterhouse Coopers, Lehmans’ administrator, is still unwinding these contracts and says it could be up to two years before investors find out if they will get anything back. The contracts were so complicated PWC says it doesn’t even know whether the creditors in fact own the money.

Why, then, is Arc still offering the very products that caused the problem in the first place? Last month it unashamedly launched three new structured products that look to me every bit as opaque as the last lot.

One, Arc’s Bricks & Mortar Plan 2, offers a 1% return for every 1% gain in the Halifax house price index above 70% of its starting level. In other words, another 30% fall in house prices is built in, after which you start to gain when the property market improves.

Trying to pick the bottom of the property market isn’t a bad idea in theory — but when products are this difficult to explain, steer clear.

At least your capital is protected — or is it? Bricks & Mortar Plan 2 is underpinned by a “major financial institution with a Standard & Poor’s rating of A+”. Sounds good, but Lehmans had a similar rating just weeks before it went under.

It would be nice if Arc would tell investors precisely which bank it is using, so they can judge for themselves, but it refuses. Why? Because the investment banks make it sign non-disclosure contracts.

Arc says it is talking to the banks to persuade them to come forward. Surely it should have waited for them to play ball before launching further products? “No-one would do any business if we waited for that,” a spokesman said. Maybe they shouldn’t be doing this business in the first place.

AIG Life is another firm that apparently hasn’t learnt its lesson. Thousands of investors in its Enhanced fund face losses of between 10% and 25% in what was essentially billed as a cash fund, with not much more risk than a building society account.

Private banks that sold the fund, which include Barclays Wealth and Coutts, now face mis-selling claims and a possible £1 billion legal action from disgruntled investors, but AIG seems not to have learnt from the immediate past and is offering investors two options: exit the fund and suffer the losses, or roll into a new fund for three and a half years with a “guarantee” that you will get the money back at the end of the term.

The guarantee is backed by AIG Life UK, which is backed by its parent Alico, which is in turn a subsidiary of AIG Inc. But AIG is selling Alico, so the guarantee will pass to the new owner and we have no idea yet who that will be — so it’s a pretty flimsy promise by any standard.

With high-profile names like Jeremy Clarkson embroiled in the AIG saga, this is about to go nuclear, and anyone who has used the term “guarantee” loosely in their product brochures should be worried.

Kathryn Cooper is editor of the Money section

Times Recommends

• Gazprom brands Ukraine 'a barbarian' in gas row
• Services sector raises fears over UK jobless
• Retailers surge as profits survive sales plunge