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Treasury to pay £50m in Equitable Life compensation next week

The Treasury will pay out £50m in Equitable Life compensation next week after the Autumn Statement revealed payments would be made earlier than expected.

Speaking at Treasury questions yesterday, Treasury financial secretary Sajid Javid fleshed out details of the payments timetable and revealed 9,000 people would take home £5,000 each next week.

A further 450 people in receipt of pension credit will receive an additional £5,000.

The Treasury had been aiming to make payments by next April but Equitable Life annuitants will now receive the cash in time for Christmas.

In June 2011, the Treasury began distributing compensation to Equitable Life policyholders who annuitised after 1992.

It is being operated by National Savings & Investments, which has paid out £734m of a total £1.5bn provision for payment to policyholders.

In April this 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.

Javid said: “Thanks to the legislation this Government have brought forward, we are now ready to make payments.

“Today, I can confirm over 9,000 people will receive lump sum payments of £5,000 each next week, before Christmas, and a further 450 in receipt of pension credit will receive an additional £5,000 each.”

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