In the Comprehensive Spending Review, published today (20 October), Chancellor George Osborne confirmed that the Coalition Government would make a £1.5bn compensation payment to members of the UK’s oldest insurer, Equitable Life, for the losses they suffered when the firm collapsed.
After a decade long struggle for a payout, Chancellor Osborne stated that ‘It is time to right the wrong’ for the one million policyholders that lost thousands through mismanagement and poor regulation.
Equitable Life payout: the details
Under the Government’s payout scheme, £620m will be paid to compensate in full 37,000 Equitable Life with-profits annuity holders, who had on average lost £16,000 – with over 50% of these now aged over 75. Regular payments will be made for these annuitants to replace the income that they have lost throughout the Equitable saga.
Around £355m will be paid out in compensation to Equitable Life members this year, £520m next year, £315m in 2012/13, and £210m and £100m in the remaining two years. All compensation will have been paid by the end of the Coalition Government’s term in office.
When will Equitable Life members begin to receive compensation?
The hope is that payments will reach Equitable Life members by the middle of next year. The Government has announced that The Independent Commission on Equitable Life Payments will be set up in January 2011 ‘to advise on the allocation of funding to policyholders.’
Equitable Life told Which? that it would be publishing information on any questions you might have surrounding the compensation on its website.
When the compensation scheme takes effect, we will be publishing a guide telling you if you’re eligible to receive a payout and what to do to claim it, all on the newly relaunched www.which.co.uk.
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