Members of the beleaguered life insurance company Equitable Life, with whom a million savers lost £4bn after a decade of mismanagement and poor regulation, will receive £1.5bn in compensation from the Coalition Government.
In a leak from the Treasury department on 16 October, the Government announced that it would confirm the compensation payout in Chancellor George Osborne’s comprehensive Spending Review on Wednesday 20 October.
Have Equitable Life members got a fair deal?
After Equitable Life was pushed to the brink of administration in 2000, their members, many of whom lost all of their pension savings with the company, have been fighting to get compensation from the Government. The Financial Services Authority (FSA) was held responsible for the poor regulation that allowed Equitable to fail.
The Parliamentary Ombudsman carried out two detailed investigations into Equitable Life’s collapse, and recommended that its members be compensated with a payout of between £4bn and £4.8bn for their losses.
However, the most recent report under the previous Labour government suggested a payout of between £400 and £500m. The new deal triples that sum, but falls far short of the original recommended payout.
How can Equitable Life members claim compensation?
The details of the compensation scheme are to be announced in tomorrow’s Spending Review. The Treasury has intimated that payouts could begin as early as mid 2011.
As soon as the plans are announced, we will be publishing a full and comprehensive guide on how you can make your claim if you have been affected by Equitable Life’s collapse, on the newly relaunched www.which.co.uk.
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