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CSR: Equitable Life victims to get £1.5bn

Chancellor George Osborne has confirmed that Equitable Life victims will get £1.5bn, with with-profits investors receiving full relative compensation for their losses.

He accused the previous government of “dithering” as the “innocent victims” waged a 10 year campaign for justice.

The payments will begin next year and two thirds of the money will be paid out over the next five years.

Osborne told MPs he agreed with Parliamentary Ombudsman Ann Abraham’s recommendations for compensation, which estimated relative losses of over £4bn, but suggested that this needed to be seen alongside the current economic climate.

He rejected the finding of Sir John Chadwick, whose report was commissioned by the previous Government and suggested that payouts should be limited to between £400m and £500m.

With-profits investors will receive the biggest payouts and will be compensated in full for their relative losses.

Treasury Financial Secretary Mark Hoban says: “The Government has always been committed to making fair and transparent payments to Equitable Life policyholders, through an independently designed payment scheme, for their relative loss as a result of regulatory failure. The previous Government spent ten years trying to find a solution to the Equitable Life scandal. We resolved the situation in just five months.

“We shall be paying in full the category of policyholders who suffered most from their losses. For other policyholders, we shall be providing a level of funding for the payment scheme that strikes a fair balance between the interests of policyholders and those of taxpayers in the current difficult financial circumstances. We need to continue the rapid progress that we have made in just five months so we can meet our aspiration to make the first payments by the middle of next year.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. What about my compensation for the numerous pension plans that I failed to set up because Equitable Life did not pay intermediaries and their clients believed this. If I had been more highly qualified would the clients have believed me then ?

  2. I have not commented on this before. My last comment being twenty years ago when I warned of E.L.’s inevitable demise. However, I am tired of these people being referred to as ‘victims’ unless it is of their own greed or stupidity.

    Everyone of them had the chance to go to a properly qualified advisor, IFA, Lawyer or Accountant. They chose to believe however, that E.L. had ‘no middlemen’ earning ‘commission’ and ignored the greedy broker. The fact that the ‘performance related bonus’ was paid to ’employees’ seemed to escape them. They chose to fall for the dishonest rhetoric of E.L. and should live with it. I have made stupid mistakes myself and don’t expect anyone else to pay. Nor will I pay out to losers when I get it right. Close this file and grow up.

  3. Does anybody know on what date did the MPs pension arrangement move their funds from Equitable Life ?

  4. How rude and pompous you are Steven Berry. Not everyone had the benefit of IFAs or lawyers but simply joined the company pension scheme. We were encouraged to pay AVCs and built up a pot for our rettirement. This has been stolen from us!! How dare you suggest that we were being greedy or stupid

  5. I totally agree with your comments JL!
    My husband was in a Company Pension Scheme was encouraged to pay AVC’s and YES this money was stolen from the pot. How individuals would pay to check their Company Pension Scheme – how naive are you Steven Berry or maybe you live on a different planet?

  6. Christian Patricot 20th October 2010 at 4:13 pm

    I was an ELAS rep and became an IFA in 1996. As I have repeatedly posted on this site the only policyholders who deserve full, backdated compensation are the with profits annuitants who had no alternative available to them. I am extremely pleased that this is what the Gvt seems to be planning to do and yes it does mean we all have to contribute towards helping them. For those policyholders who commented today, please refer to the Oxford dictionary for the definition of “theft”. Your money was never stolen. Your money was invested in a company that was effectively made worthless by the arrogance and incompetence of its senior mamangement. You all have had ample opportunities to take your money out since January 2000 and had you done so would have more than made up for the cuts that were made in 2000 to your WP investments via ELAS. Why should everyone else’s tax pay for your choice to do nothing except allow ELAS to run tens of millions of pounds in fruitless legal bills?

  7. I am making a simple point. When I buy a car, I check a few options, I gather information. When I buy a burglar alarm or a diamond or dental treatment I do the same. Why would anybody make a commitment of even £50 per month (£15,000 over 25 years) without some sort of analysis? I believe that the vast majority of people on this planet are good and honest but when making a major financial commitment I try to check out the background as it is my responsibility.

    I know people who lost money with Lehmans Bank and didn’t know them from Dewhursts or The Rug Doctor. I also know someone with 19 stock market analyst reports that said Lehmans were sound. The latter has my sympathy because they took responsibility. I once saw a pencil in the US that had printed on it ‘please do not stick this in your eye’. I just think we all should think how much responsibility we bear before turning to someone else to blame. The company pension scheme argument does have more merit however but I am not sure anything has been ‘stolen’. As I say, I have tried to stay out of this, but if there was genuine theft, surely there wouldn’t be a problem? I have no time for failed regulators and I wrote to all major newspapers and the National consumer Council about the dishonesty of the advertising. All to no avail. I tried to help you all before it hit the fan. I only wish more people had listened.

  8. Seems to me that it is another example of the “bottom wiping society” where people want to be free to make own decisions but when it goes wrong they want somebody else to pick up the piexes.
    As a retired advisor I agree with David Snell…..I missed out on many schemes because people thought I was a money grabbing so and so whereas the good old EL rep wasn’t paid commission!

  9. my husband was in a company pension scheme he lost money .Will this payout affect him

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