Equitable Life payouts to begin in June
Investors who lost money with Equitable Life should finally start receiving payments from the compensation scheme next month.
The £1.5 billion Equitable Life Payment Scheme will contact all eligible policyholders directly and is expected to start paying out at the end of June.
With-profits annuity policyholders will receive full compensation for their losses, while other policyholders will receive a share of the £775 million set aside for them in proportion to the size of their losses.
Mark Hoban, financial secretary to the Treasury, says: ‘This [the payment scheme] is a complex issue, but the scheme has been designed to reflect the principles of fairness, transparency and simplicity.
‘When payments start in the middle of this year it will be a huge milestone for the policyholders who have waited so many years for the resolution of this matter.’
With-profits annuity holders were particularly vulnerable to Equitable Life closing to new business in 2000 and its subsequent near collapse because they were unable to move their funds elsewhere and were already retired. They are also generally the oldest policyholders to have suffered from the ongoing Equitable Life saga.
National Savings & Investments will make the payments on behalf of the Equitable Life Payment Scheme.
The scheme will prioritise older accumulating with-profits and conventional with-profits policyholders for earlier payment, and also prioritise payments to estates of victims. It will start payments to with-profits annuitants within the first 12 months of the scheme.
The scheme will not prioritise payments on the grounds of hardship.