View more on these topics

Million Equitable clients to get just a quarter of their losses

Almost a million Equitable Life policyholders will be handed less than a quarter of their relative financial loss 10 years after the firm hit major problems.

The Independent Commission on Equitable Life Payments’ report, published last Wednesday, recommended that 945,000 non-with-profits savers should get 22.4 per cent of their relative loss, with the £775m compensation pot divided on a pro rata basis. These savers can expect, on average, £820 each. The remaining 100,000 policyholders who incurred relative losses will receive no payment because their pro-rata allocation amounted to less than £10.

The commission said such small payments would incur “disproportionate” administrative costs and would be of “negligible significance” to recipients.

The Treasury confirmed that the oldest victims and estates of deceased policyholders will be given priority in the order of payment.

Treasury financial secretary Mark Hoban said: “We have 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.”

Independent Commission chairman Brian Pomeroy said: “The commission has listened carefully to the views of interested parties and we believe that our conclusions will deliver an outcome that is simple, transparent and fair for policyholders.”

The details of how non-with-profits annuitants will be treated follows last October’s confirmation that 37,000 with-profits investors will receive a total of £620m in compensation. With-profits investors suffered, on average, losses of £16,500 each.

The total compensation figure of £1.5bn represents around a third of the estimated £4.3bn relative losses.

In an interview with Money Marketing this week, Shadow work and pensions minister Rachel Reeves concedes that Equitable Life victims waited too long for compensation under the Labour Government.

She says: “I would say that people with Equitable Life policies have had to wait far too long to get the compensation they are entitled to. Additional compensation is welcome but I do not think it compensates for the losses they have had to endure.”



Risk profiling: Psychological conditions

A few weeks ago, I wrote about the perils of risk profiling, so I was pleased to read the FSA paper that identified lots of short-comings in risk-profiling tools as well as in their users. Some of these are obvious but the FSA’s prescriptions have scary implications for advisers and product providers. To start with […]


New financial regulations should not be rushed, warn MPs

The Treasury select committee has warned the development of the new regulatory architecture should not be rushed for fear of creating flawed regulation. In a report released this morning, Financial Regulation: a preliminary consideration of the Government’s proposals, the committee says it is concerned about the risks of proceeding with “undue haste”. The Government says […]

Broker sues FSA over cancelled permission

Mortgage broker Adam Lucas is suing the FSA for up to £1.6m over the regulator publishing a decision notice cancelling his permission to operate as a broker. The FSA issued the final notice last year after Lucas, of People Loans, failed to pay £1,350 in fees. It issued a decision notice on February 2, 2010, […]

Towergate secures £200m private equity investment

Private equity firm Advent International is to make a £200m investment into insurance intermediary Towergate Partnership. The deal was tipped at the beginning of the year. It is conditional on Towergate raising new debt facilities through the bank and bond markets. The £200m investment and the debt capital raising is expected to be in mid-February. […]

CGT entrepreneurs' relief

Entrepreneurs’ relief is due, subject to meeting certain conditions, in respect of capital gains arising on ‘material disposals of business assets’. These ‘business assets’ include: Read more


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Please stop repeating the Treasury’s story on compensation without examining it. You say “The Treasury confirmed that the oldest victims and estates of deceased policyholders will be given priority in the order of payment.” This is not true because many, if not most, of these fall into the pre-1992 trap. If you read the small print these policyholders, for some completely spurious reason, get NOTHING.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm