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Equitable Life payments to be made next year

Equitable Life payments to be made next year

Category: Money

Updated: 22/07/2010
First Published: 22/07/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Savers who lost money from the near collapse of Equitable Life have been told they can expect to receive some compensation next year.

The announcement comes as Sir John Chadwick published his final report on how much money was lost because of Government maladministration.

An independent commission has been put together to advise on how to best allocate payments to Equitable Life policyholders, and it is to report in January 2011.

Those looking for a bumper payday may be disappointed, however.

While the Financial Secretary to the Treasury, Mark Hoban, said that the total amount offered in compensation would be revealed in October, he warned that 'it is appropriate to consider the impact of any scheme on the public purse'.

"I want to see a swift response, but also one that is transparent and fair to all policyholders, and the taxpayer," added Mr Hoban.

The recommendations made by Sir John in his report, while not binding, give some indication as to the level of compensation that Equitable Life customers can expect.

In his finding, he said that the total loss suffered by policyholders was somewhere between £2.9 billion and £3.7 billion. However, it is recommended that compensation should be capped at 20% to 25% of that amount for each policyholder, which is likely to total around £400 million to £500 million.

Given that around one million people were affected, compensation could be as low as £400 per person.

It was also confirmed that compensation will not be means tested and that monies would be passed onto a policyholder's estate of they have passed away.

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