Equitable Life victims to receive 22.4% of their loss
The Independent Commission on Equitable Life Payments report, published on Wednesday, said the Treasury will allocate £775m in compensation on a pro-rata basis.
The report confirmed the oldest non with-profit policyholders and the estates of deceased policyholders will be prioritised in the order of payment.
The remaining 100,000 policyholders who incurred relative losses will receive no payment because their pro-rata allocation amounts to less than £10.
The report said this reflects the commission’s view that administering very small payments below this sum would be disproportionate to the administrative costs of making them while being of negligible significance to recipients.
The administrative cost of making a payment to those with individual policies is likely to be approximately £10 and may be higher for other policyholders.
Mark Hoban, financial secretary to the Treasury, 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.
"I am grateful for the work the commission has done to establish policyholders’ concerns and have used this to recommend the principles of the payment scheme.
"I welcome their recommendations and we will now use them as the basis for making payments to policyholders."
Brian Pomeroy, chair of the Independent Commission on Equitable Life Payments, said: "I am very pleased that the government has accepted all our recommended principles.
"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."