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Govt payouts to Equitable Life policyholders hit £800m

The Government has now made payments of £816m to 717,600 policyholders through its Equitable Life Payment Scheme.

The Treasury set up the £1.5bn compensation scheme in June 2011 to make payments to Equitable Life policyholders who annuitised after 1992 and suffered financial losses.

Between August and December the scheme paid £82m to 170,000 policyholders – almost 1,400 policyholders every day.

In total there has been 375,672 payments to individual investors totalling £511m and 33,547 first payments to with-profits annuitants totalling £64m.

Subsequent annual payments of £116m have also been made to annuitants. A further £15m has been paid to the estates of 2,425 deceased annuitants and £110m to 305,956 people who bought the policy through their company pension scheme.

In April last year, the National Audit Office warned the Government it should extend the deadline to pay policyholders because it was too short, and the Government had failed to prepare sufficiently beforehand. 

In July the Public Accounts Committee chair Margaret Hodge slammed the “unacceptable” Treasury handling of the scheme and claimed up to 20 per cent of policyholders could miss out.

The Government has since extended the payout deadline from April 2014 to April 2015 to ensure people are compensated.

Treasury financial secretary Sajid Javid says: “This Government has allocated up to £1.5bn to help Equitable Life policyholders and we are making strong progress to help those who suffered an injustice.”

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