The Government’s decision not to compensate Equitable Life members who annuitised before 1992 was unfair and wrong, according to and Pensions select committee member Andrew Bingham.
In June, the Government began distributing £1.5bn of compensation to those who annuitised after 1992. It chose the cut-off date because before then there was no maladministration in the firm which, if spotted by the regulator, could have affected policyholders’ investment decisions.
But speaking to Money Marketing at the Conservative Party conference last week, High Peak MP Bingham said the 10,000 people who annuitised before the cut-off date should have been included.
He said: “When the vote came through the House of Commons I voted against the Government because I thought the pre-1992 annuitants should have been entitled to compensation. There were a few of us who thought the same, but not enough.
“Even though their losses were not the result of regulatory failure, I think it was unfair and wrong to exclude them. A lot of Equitable Life policyholders feel the Government’s solution is not as they would wish.”
Under the compensation scheme, £620m will go to 37,000 with-profits investors compensating them for relative losses. Two-thirds of the money is expected to be paid out by 2015.