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Equitable Life victims to receive compensation under new coalition

Savers who lost money in the Equitable Life saga will benefit from a new compensation scheme announced yesterday by the new coalition government.  

 

Over one million people who lost money as a result of the Equitable Life scandal in 2000 will benefit from a new compensation scheme, the new coalition government announced yesterday.

The parties said they would compensate Equitable Life policy holders for their ‘relative loss as a consequence of regulatory failure’, as advised by the Parliamentary and Health Ombudsman.

This offers the savers who lost money when the pension company near collapsed in 2000 a better deal than the scheme previously being devised under the Labour government. 

Chris Wiscarson, chief executive of Equitable Life, said: ‘We are delighted with this development.’

‘We look forward to working with the new government to deliver a payment scheme that is swift, simple, transparent, fair and seen to be fair’, he added.

Meanwhile, Paul Weir, spokesperson for Equitable Members’ Action Group, said: 'We welcome the new Government’s commitment to implement the Parliamentary Ombudsman’s report in full. After 10 years of denial and obstruction by the previous administration it has been a long time coming'.

'Sadly, many thousands of Equitable pensioners have died without justice, sacrificed on the altar of Gordon Brown’s defence of ’lite touch’ regulation,' he added.

Last year the Labour government apologised to victims of the Equitable Life saga, after an ombudsman report claimed ‘a decade of regulatory failure’ was responsible for the pension company’s near collapse. 

22 comments so far. Why not have your say?

Roland

May 13, 2010 at 10:15

Well done to this new Government for picking up and running with this so quickly. It appears that both the Tories and LibDems will be honouring their pre-election promises. On average there are one to two thousand policyholders per constituency. Most Equitable votes will not have gone to Brown who set his face against compensation for 10 years. Those votes could have made the difference between winning and losing in several cases. One such is Charles Clarke who lost by only some 300 votes. Had he supported policyholders claims for compensation, probably he would still be an MP today. Brilliant.

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Brian

May 13, 2010 at 10:28

‘relative loss as a consequence of regulatory failure’,

Well done indeed, lets just hope this new government looks at many more Regulatory Failure issues and helps to put the injustices right for the people who have suffered due to incredible incompetence.

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Sungei Patani

May 13, 2010 at 10:52

As someone who lost out badly on my pension with Equitable Life I am not convinced that this is a good move.

We have disgracefully large budget deficit and absurdly high taxes. Those of us who lost out should bite the bullet and accept our tough luck. I don't see that it right for other taxpayers to fork out on our behalf.

I don't believe in windfall taxes if I get lucky; conversely if I lose it is something I should accept with good grace and not go whining to the government for a handout.

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Will

May 13, 2010 at 11:05

Many policy holders ,I for one , were excluded from claiming compensation because we were 'advised ' by the Equitable

literature , and not solely by a salesperson.

No justice here.

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Martin

May 13, 2010 at 12:39

I lost about 20% of my money in the ELAS School fees scheme, which was structured around the Equitable School Fees Charitable Trust. As such, it seems that it was down to the trust, not me, to get compensation and then to pass it on to me and other policyholders. Yet I have heard nothing from either the trust or ELAS. Does anyone know where I might go for advice on this?

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Brian

May 13, 2010 at 14:01

If all those people who lost savings in the failed bank crises, were compensated, likewise savers in the Equitable should also.

Saving for retirement is paramount and therefore savings should command a higher priority for compensation than bank accounts.

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David Thickins

May 13, 2010 at 14:14

Could someone please clarify something for me. As regards compensation for Equitable Life's former customers, what (if any) will be the distinction between someone drawing a pension originating from payments to Equitable Life and someone who built up a sum of money with Equitable Life that was used to buy an annuity on retirement? I fall into the latter category. Considering the number of years I paid into the fund and the total sum paid, I find the returns are

less than I would have hoped.

David Thickins.

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Peter

May 13, 2010 at 14:56

This Indian fellow (Sungei Patani 13 May 10.52) who is bemoaning the good news that we hard up pensioners may get a treat soon is obviouly not aware just how much pensioners have suffered due to the Equitable debacle. In my case I lost around 40% of my pension having been advised by Equitable management (2001) that "I would be foolish to withdraw what was left of my pension money as things were looking up"

Well Sungei, maybe you will loose 40% of your pension when you are on pension and it will serve you right!

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Roland

May 13, 2010 at 15:41

Sungei - Please define 'lost out badly'.

Are you a Brown stooge?

If you don't need the money then give it to charity but I for one don't want to continue suffering because of Brown's highly flawed light touch regulation and desire to cover his, the FSA's and The Treasury's incompetence. If action had been taken sooner then perhaps some of the other things that happened later in 2008 could have been avoided.

There are plenty like Peter and me who have lost out big-time and both the Tories and LibDems recognised this while slime-balls like Byrne, Kelly and Cooper tried to cover up for Brown. Hopefully, there will be a full blown enquiry into the goings-on at ELAS, The Treasury and GAD against a background of Brown not wanting minutes of meetings to be taken.

If you buy a annuity as we had to do by law, it is only right that the Government protects the administration of that annuity at all times.

No, while Brown can afford to go off and do charity work because of the state-backed, index-linked pension that he arranged for himself, others will be paying for his profligacy for decades to come.

Will - you had a claim for mis-selling.

Martin - You are almost certainly timed-out. Statute of limitations and all that.

David - Depends upon your annuity. If you are a with-profits annuitant you are likely to be a compensation beneficiary.

Brian - Hear hear!

R

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AJB

May 13, 2010 at 16:14

For the Bradford and Bingley, Alliance and Leicester, Northern Rock and HBOS shareholders ....

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bernard croston

May 13, 2010 at 18:28

It's nice to hear of Equitable Life policy holders receiving compensation but I believe Lloyds Banking Group shareholders have an even stronger case. Thousands of pensioners rely on their Lloyds Bank shares to suppplement their pensions income. At one stage last year they had lost 90% of their capital and the dividend income was cut completely. They have also had to put more money in through rights issues to stand any chance of getting their money back in the long term.

LLoyds TSB was very conservatively run which cannot be said for HBOS. The Government forced through the merger without telling LLoyds Bank directors or shareholders that just before the merger the Government secretly pumped cash into HBOS to keep it in business. If this had been declared neither the directors nor the shareholders would have approved of the merger.

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James

May 13, 2010 at 19:01

I put my whole pension pot from 23 years working for a newspaper into an Equitable Life With Profits annuity in May 1999 when I was 56 - partly to have income to help pay for my daughter's university. The product I bought should not have been on the market at all. After the reduction in values following the Lords judgment, the annual decline was severe. Alas since Prudential took over our annuities in 2008, things have got worse, and the two years since has seen the annual amount paid by Prudential decline by almost £1000. If this compensation for what has happened and the restoration of fund values is what is being suggested and what the ombudsman proposed - there is some hope that With Profits will not simply mean "with losses". It is not a matter of fleecing the taxpayer at all, but of compensating appalling failures in government oversight.

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James

May 13, 2010 at 19:07

I also had Lloyds-TSB shares. But owning shares is not at all the same as being tied down with an annuity. Shares go up and down and nothing is guaranteed. A With Profits Annuity is also subject to some market variation. But the product was not in the least "high risk", nor was it intended to be. It was designed to allow some variation. But the operation of the fund was absolutely not as the product required - once the Lords judgment had been made on Guaranteed Annuity Rates.

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Sungei Patani

May 13, 2010 at 20:09

Peter,

What difference does it make if I were Indian? In fact I was born in Surrey of wholly British parents and am as English of most people of my generation.

I take my nom-de-plume from a small town in Kedah I used to live in over fifty years ago.

I am currently on my pension so it is serving me right as well - I just don't expect tax payers to bail me out.

Roland.

Almost impossible to tell how much I lost out as I don't know what the return I would have received had I invested elsewhere. I only know I now do not have anything like as much to live on as I had planned so I am having to continue working at seventy to supplement what pension I do get.

I am certainly not a Brown stooge; in fact I spent every day between the election being called and polling day working for my local conservative candidate. If Brown and his clique of crooks were to pay the money out of their own pocket than I would be all for it. I just don't see it is the responsibility of the tax payer.

I too have lost out on Lloyds-TSB cock-up. However again I don't see why the tax payer should compensate me - I don't expect them take any profits I may have made for example on British Gas other than normal taxation.

As a nation we have to understand that the world (taxpayer) does not owe us a living; I, like most people, invested in Equitable because we thought it would bring us the best return. It didn't - tough!

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Roland

May 14, 2010 at 01:24

Sungei - Sorry old chap - you appear not to understand how this was supposed to work.

I was required to buy an annuity - by law - and I chose to buy a WPA with ELAS as a provider with a long history of some 150 plus years and regulated by the FSA. The market risks were for me but the provider risks were for the regulator. It was for the regulator to ensure that ELAS was administered properly. Bear in mind that I couldn't move that annuity even if I wanted to. The regulator i.e. the Government let me down.

You are in minority with your view but as I say you can always forgo your payment. I can suggest several deserving causes. Conservatives and LibDems know that compensation is justified - as do many fair thinking Labour M.P.s - the likes of for example Tony Wright. In addition so does the PO and any number of legal cases over the last 10 years - and there is also the EU. Brown has delayed and covered up for all of that period but even he was made to face up by the last court case. Then he just bought another shoddy judge - Chadwick - with a brief to delay payments until after he was [booted] out of office. So-called honourable knights come cheap you see.

Of course you are entitled to your view - there is always one in every village.

I note you are coy on the amount you have 'lost' - an adjusted figure would have done to help us understand. Those who have truly lost out have a very good idea of how much they have lost. It is my view that it is a very small figure and not anywhere near the sort of figures lost by some of the posters here. And you also claim to be 70 and still have to work - and you don't think you deserve compensation? I smell a rat! [Please don't post an amount now as it is too late for me to believe you].

But I guess there is always Brown's mean-tested benefits for us to fall back on.

Roland

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Sungei Patani

May 14, 2010 at 11:18

Roland,

What a pity you have to question my honesty rather than deal with my argument. I am seventy and am still working, not a claim - a fact. There is no rat to smell!

I fully accept that people including myself have lost out badly due to the incompetence of the Equitable board and of the Brown government's regulator. I also fully accept that others must have lost out more than me - I doubt if I was the richest person contributing to Equitable's funds and the more you put in the more there was to lose.

We in Britain over the last ten to twenty years have become obsessed with the "compensation culture" where every set back has to be someone's fault who has to pay. In many cases the person who pays is in some way responsible for the original loss hence there is some element of justification. for the compensation paid.

The tax payer was in no way responsible for the loss, I and many others experienced, as a result of the Equitable debacle. Hence the taxpayer should not pay.

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Roland

May 14, 2010 at 12:51

Sungei - No I don't believe you for half a second because you are inconsistent.

There you go again saying that you 'lost out badly' but you don't know the amount that you have lost by any measure whatsoever. I simply cannot comprehend that you make this assertion in ignorance. My guess is that you have lost a couple of hundred quid whereas many others have seen their lifetime pension savings of 10's of thousands of pounds decimated.

Read my post closely please. All of your so-called arguments have been addressed and it is you who have not attempted to any degree to address mine. You merely assert that the tax payer shouldn't have to pay. I have given you many reasons why? so respond to them please!

Moreover, what is the purpose of a regulator if it is not to spot failure in regulation? Let's save the cost of regulation and let us all rely on 'buyer beware' for at least then not to put any reliance on the words 'regulated by the FSA'!

So all the judges that adjudicated the many court cases in the last 10 years, the PO, the EU, the Tories and the LibDems are all wrong and you and Gordon Brown are right. Well you are in excellent company.

And by the way, this tax payer isn't responsible for the wars in Iraq and Afghanistan but I'm having to pay for them. It's called democracy.

Bye bye.

Roland

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Sungei Patani

May 14, 2010 at 14:10

Roland,

Again you question my honesty without any justification. Nothing I have said is inconsistent. I am unable to quantify accurately the amount I have lost because I would have to compare it with the return one would have obtained elsewhere over an equivalent period but it certainly runs into many tens of thousands of pounds on a capital sum.

You have not addressed the basic premise of my argument - why should the taxpayers of Britain fork out on your or my behalf just because we have lost out for whatever reason. We have been very badly treated, but two wrongs do not make a right - it is not up to the taxpayer to bail us out. As I said before (consistent) if Gordon Brown could pay it out of his own pocket I would have no objection.

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Roland

May 14, 2010 at 16:54

The tax payer should pay because:

Two PO reports say that there was regulatory failure over an extended period, the EU agree, the Tories agree, the Lib Dems agree, a lot of Labour MPs agree, the Public Accounts Select Committee agrees, the majority of MPs agree, Treves of Equitable Life agrees, the current management of ELAS agree and most of the 1m ELAS policyholders agree. Is that clear enough?

But I do accept that you and Gordon Brown plus a few of his lackeys disagree.

But do answer the following please? What do you consider the role of a financial regulator to be? And what do you think should happen when there has been a proven failure of financial regulation?

Roland

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Sungei Patani

May 14, 2010 at 20:33

Roland,

The world is full of people wanting to spend other peoples money, the list you have produced is no exception.

In answer to your specific question. If there is a proven case of regulatory failure and compensation is deemed necessary then it should come from an insurance levy imposed on the financial services industry - as in many cases it is. Not from the taxpayer as in the case of Equitable.

The taxpayer was not responsible for our loss hence the taxpayer should not be made to compensate us. The government is borrowing some £165billion this year; we will be paying £68 billion per annum in interest on our debt by 2014 half as much again as the defence budget. We just cannot afford expensive gestures like compensation payments that simple increase the national debt.

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Equitable Life victim

Jul 26, 2010 at 17:31

Sungei

..Tell me, If you were burgled and theives ran off with everything you own, you wouldn't go to the police then?

If the Police did catch them, you wouldn't ask for your possesions back?

..I think you must be loosing the plot mate?

As far as I'm concerned EL/Government have stolen my money and I want it back.

I don't care where it comes from.

People would soon start moaning If child allowance or benefits were stopped.

We are not asking for charity, we want the agreed and signed deal to be honored.

The Government underwrite the deal. They are responsible for paying up, not hiding and waiting for everyone to die off.

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dd

Sep 07, 2011 at 13:02

"if Gordon Brown could pay it out of his own pocket I would have no objection"

and so he should.

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