The government will make an ex-gratia payment of £5,000 to Equitable Life policyholders who bought their Equitable Life with-Profits annuity before 1 September 1992 and are therefore not covered by the existing £1.5bn redress scheme.
In today’s Budget (20 March), George Osborne, chancellor of the Exchequer, said that a further £5,000 will be available to those policyholders who meet the above criteria and are in receipt of pension credit.
Mr Osborne said these one-off payments are “in recognition of the resulting pressures this very elderly group face, having not received the income they hoped for from their Equitable Life annuity.
Payments will be made in 2014-15 or “earlier if possible”, Mr Osborne added.
He said: “We are not legally obliged to do this, but it is the right thing to do.”
In February 2013, the Equitable Life Payment Scheme confirmed it had made payments totalling £535m to eligible policyholders as of 31 January 2013, meaning it is back on track to hit government targets after initially missing a deadline to compensate individual policyholders last year.
In October 2010, the government announced total compensation of £1.5bn for Equitable Life and in June 2011 it made the first payments. The scheme was set a target of writing to all eligible policyholders by mid-2012 and finalising all compensation by mid-2014.
