Regulation  

Gov’t brings forward Eq Life redress and doubles payout

The government will make payments to Equitable Life with-profits annuitants this financial year instead of the next as originally planned due to the age and financial hardship many elderly policyholders may be facing.

In his Budget 2013 Chancellor George Osborne announced the government would make one-off payments of £5,000 to people who have at least one Equitable Life Assurance Society’s With-Profits Annuities dating from September 1992 and aged 60 or over as of 20 March 2013.

The payout was offered to this group of customers because they are not otherwise covered by the £1.5bn redress package that was promised to Equitable Life policyholders in June 2011, to be paid by mid-2014 at the latest.

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In a statement, HM Treasury said: “The government decided to make these payments as this particular group of policyholders is elderly and may be under financial pressure, as they have not received the income they had hoped for from the Equitable Life annuity they bought over 20 years ago.”

The government also confirmed today that an additional £5,000 will be paid to those policyholders who meet the above criteria and are in receipt of Pension Credit when the payments are made.

The regulations necessary to make the payments in this financial year will be laid out when both Houses of Parliament return from recess, the Treasury added.

Letters to all eligible individuals - estimated to be between 10,000 and 11,000 - will be sent out this week.

In July, the Treasury was heavily criticised in a report into the Equitable Life scheme by the Public Accounts Committee, which said it had “failed” to learn lessons from previous schemes and that, as a result, more than 230,000 individuals may not be compensated.

In particular the committee slammed the Treasury for refusing to examine the data previously provided by an action group on 350,000 policyholders over Data Protection Act concerns, saying it did not explore alternative options to overcome these issues.