Equitable Life victims could receive just £400m compensation

Is that just for this year or overall?

Not much use without a full explanation !!

I know I will get slagged for saying this, but most Equitable Life "victims" I have ever met have actually been well-to-do accountants, solicitors, businessmen, etc, with houses in London and second homes elsewhere.

They keep bleating on about "compensation".

If they want government hand-outs, then it should be means-tested.

Mark Hoban is the person who advised the Commons the other day that the FSA would be looking into Bankers remuneration packages ! He would be better advised to look into the pay of staff in the FSA first !!

We need to know more about the basis of this compensation to EL clients.

Is it not strange that l do understand that the House of Commons preferred AVC scheme was Equitable LIfe.

Is this to paid to all policy holders, or to those who have started to draw their benefits?

£400 too much, in my opinion: so many so-called Equitable "victims" are or were so-called "professionals," such as lawyers, accountants, surveyors and similar, who did not want to pay another professional for financial advice, so chose the Equitable as a "non-commissioned" life office. (Ever notice how the more successful Equitable "advisers" had better cars, more holidays, better office accommodation etc.)

Having eschewed professional advice themselves to save money, they effectively became their own adviser so only have themselves to blame.

It's not surprising that not too much publicity is being generated by this: these greedy self-serving complainers do not want too much light shone on them, as even more people may find out about the true nature of this situation.

I fully agree with Neil Telford. I was a rep for ELAS between 1991 and 1996 and got a lot of feedback from my ex colleagues in Jan 2001. The only policyholders who deserved and should have received full compensation are the with profits annuitants who by law were forcibly stuck in their contracts. Everybody else had the chance to move out of ELAS from day one or to move out of the WP funds and into any other unit linked funds provided by ELAS. Where do the policyholders and the various action groups bleating about compensations think their compensation money come from? All they have succeeded in doing since 2001 is allowing lawyers and gvt appointed representatives to earn fat fees.

Quite right Neil, but you should certainly not be slagged for criticising these greedy people.

Furthermore, most Equitable Solicitor/Accountant policyholders swallowed the guff about not paying commission spouted by EL and their highly paid, and 'incentivised' SALES force, and though they were getting a better deal than from a commission paying Company.

They were also seduced by the high payouts made by Equitable, not understanding, nor wishing to, that these were at the expense of proper reserving for future liabilities and bonuses.

To put it another way, it was greed that motivated them to buy Equitable contracts, just as greed now motivates them to pull the wool over the eyes of Regulators, the Courts and the Government, and in so doing defraud the taxpayer..

I think you might find that the victims of fairpak might be very happy with up to £400 compensation.

I in turn agreed with Christian.

There are probably hundreds of thousands of people in this country still paying penson and investment contributions each month into "zombie" With-Profits funds with certain closed life assurance companies (naming no names) that have been paying no bonuses for the greater part of the last ten years, and they have no idea !!!

They won't receive any compensation, as they will never complain !!!

In comparison, the Equitable Life With-Profits funds do not look that bad right now.

Only £400 million! That's £400 million too much, with profits annuitants excepted.

Much of the evidence appears to suggest that many of these people chose Equitable Life because they believed that the absence of explicit commission meant they could get something for nothing. As we know, that is virtually never so.

The bad thing about commission is the way in which the system is manipulated and exploited. Much of that will be solved by CAR and many IFA's have long since moved to just such a model without having had to be coerced into it by the FSA.

The banks, meanwhile, carry on flogging products of often highly questionable suitability and taking every penny of commission with which they can get away.

For its part, as a regulator supposedly committed to consumer protection and "better outcomes", the FSA continues to take no steps to curb such behaviour. When, if ever, will we see anything approaching a level playing field?

Why are the equitable life 'victims' being so thoroughly rounded on by all if the above. Were they not just buying a product that seemed to do well, was sold in a regulated environment (for some of the time anyway) much in the same way people bought precipice bonds and any number of products which have appeared in the latest financial crisis to 'not do what it said on the tin'.

Most people just assume that they are buying into a good company and product. Surely it is up to the regulator and dare I say it some of those who were in the industry and knew what was going on to blow the whistle?

Should we all spend our entire weekend looking through products we might want to buy for our future security for all the hidden catches. I don't think its greed to want to do well and who had the knowledge to know how eguitable life was structured. Certainly not the ordinary punter and neither would it seem the regulator.

Speaking as someone from outside the industry, and the widow of an equitable life policy holder, please understand that we are not all the greedy professionals you think we are.

Have to agree with most of the comments on here. We have one client with an old EL With Profits annuity (sold to him by an EL salesman as a better deal than a standard Lifetime Annuity) who has seen his income fall from almost £1,100 per month in 2000 to a little over £350 per month now.

When he wanted to move this in 2003 HMRC confirmed this was possible, and we had companies prepared to take it on, provided EL could provide a capitalised value and were prepared to transfer it ... they were not.

These planholders should certainly be compensated, the rest should have to live with their choice of provider, especially as many in the industry were already pointing out the folly of EL's WP strategy prior to their collapse.

£400,000,000 compenation under the FSCS basis, would be a maximum payout for loss in respect of 8,333 clients.

If that's right, then pay it. If it isn't then say why it isn't. That's why we have the FSCS and that they have rules. FSCS are probably skint, hence the reduction, I assume, but as has been mentioned earlier, it's a little difficult to guess.

The bile over the rich solicitors and accountants as well as the no commission argument is asinine, peurile and should be found on Facebook and teenage text messages.

The unilateral belief that FSCS compensation should be means tested seems to be a new one; should this be for all payments or just those via direct offers? If so, should we now nail the payments to Pacific and Continental Securities clients?

I agree that some people may have been mis-sold policies, but I object to using tax-payers funds (i.e. the money I pay to the government) to pay compensation to barristers.

If I needed to claim job-seekers allowance or council tax benefit, I would have to jump through hoops to claim it. And probably be made to feel like a social reject.

The fact that they may pay compensation to people who quite frankly have more money than they actually need does stick in my throat a bit....

Where is the fairness ?

I blame Buzz Aldrin;

http://www.youtube.com/watch?v=xGxh1clsNG8

Anythings possible when it's an Equitable Life

I agree with both Andrew and Neil.

If, as inexperienced retail customers, Equitable investors had the good sense to have paid Andrew for advice, they would not have suffered when the Equitable collapsed. In fact, I would go further to extend the same principle to those that have suffered as a result of poorly performing products that are primarily distributed by other direct sales organisations e.g. endowments, zeros, precipice bonds, structured products and life settlements.

It is entirely wrong for people to act with blatant greed to the extent that they invest money in order to grow, so they have more than other people in future years, perhaps even being less of a burden on the State in old age.

Most people that invest money are experienced and, to that extent, it is grossly unfair that we have a system of regulation in place to protect us, funded from general taxation. That this system failed in the case of the Equitable and investors suffered financial loss as a result is serendipitous. Those greedy pensioners that have suffered ongoing reductions in their income, and often diminished health and lifespan, had it coming to them.

Indeed, those that were naive enough to believe that contractual entitlements to guarantees should carry rights under English law deserve everything that they get. It is entirely wrong that everyone has equal right of redress in law. Neil is right to argue that the most appropriate solution would be to have an arbiter that evaluates claimants' rights to compensation relative to his / her own personal financial circumstances.

I wonder if, on point of principle, advisers will cease to take instructions from high earning professionals?

we interviewed an ex EL employee after they collapsed and he told us that they were encouraging sales staff to take clients out of old S226 schemes with GARs and get them into drawdown as the company would not be able to cover the annuity rates. They knew what was comming way before the problem came to the attention of the regulator.

Fortunately we were able to convince the majority of our clients to come out of their EL with profits plans (Non GAR) before the whole thing went wrong. we simply looked at the asset allocation in the fund and explained why the fund could never achieve the returns being added to plans.

However when we wrote an article to this effect in our newsletter, they threatened us with legal action, so we had to withdraw it (they had a bigger lawyer than us!) .

They collapsed 2 years later.

If I could do the maths, then all those solicitors and accountants could have done, surely? Maybe professionals like them who were themselves recommending these plans to their clients should cough up some of the compensation too? Are they not liable for the advice they gave?

Compensation should have been claimed against the accountants who in my experience recommended their clients go see a non commission based adviser at ELAS. Its against the ICAEW's rules to recommend tied agents. Probably the same for the Law Society.

Is this is a case, in the compensation game, of not who you invested with but who you know.

ELAS spun a line swallowed by those who did know better but even when faced with evidience let greed be their sole guide.

Any money should go on, a means tested basis, to the countless hoardes who did not know better and were guided by trust and ended in with profit endwoment mortgages.

Dare I suggest that one reason these solicitor, accountant et al clients of Equitable Life became clients is that they did not want to pay a fee for advice that really didn't do anything for them or add anything new; such a feeling being based on their own business operation. How many solicitors have charged for telling someone that they have been wronged but that there is no guarantee they will win an action, and charged more for taking on an action that was lost in court, or even beforehand, when they advised a client who had already spent a lot on the basis that "you have a good case," that going further could cost many thousands of pounds more, and they could lose?

How many accountants have never advised a client about tax savings through pension planning, and how many have presented clients' accounts to HM Customs and Excise exactly as the client gave the figures, with no consideration as to how the tax liability may have been lowered?

Maybe they expected the same service that they gave, so decided paying for advice was just not worth the while?

I think that many correspondents are missing the point,the issue is the irrepairable harm that the failure to compensate is doing to the whole pensions industry and by definition the future wealth of the nation which will find greater numbers of people who have not saved or invested for their old age and will rely more on state benefits.

I must declare an interest but objectively I still regard low compensation as a disincentive to savers.What I would suggest is that the government pays compensation to the dependents of the deceased and pays a form of pension to those still alive.The heavy tax regime in the U K will mean that an awful lot of it will return to the government coffers and in itself this will create a type of means testing-The better off obviously paying more in tax!

Reading comments about accountants and solicitors etc have pensions with equitable is untrue . I am a working man who delivered milk to houses ,shops etc for 25years taking no holidays days of or sickies

Paid every penny i could afford into my equitable life pension and for what ? I went for the safe with profits fund because i did not want risky investments. Now all i have is bad hip joints after years of long hours of work

TO Goverment

You want to encourage people to save for pensions i don,t think so I have three children and will actively discourage pension saving , OR LESS YOU CAN PROVE SECURITY

Forgive any spelling mistakes if any i left school with no exams So get rid of this nonsense of solicitors etc

em

I am sick and tired of people who think that because you once earned a lot of money that means when they are turned over or have something stolen from them then that's OK. How much tax do you think they have paid over the years to allow others who have spent their whole life living beyond their means, living a life they always wished they had been able to afford.

Just because you have earn't money and saved in the past doesn't mean you don't get old and need your pension. What do you think these savers have sacrificed to make their payments?

The Government were the governing body when this farce went on and they should pay for their mistakes. When the government told pension companies to pay back pensions that had been mis-sold then the full amount had to be coughed up by the pension companies themselves, now its their turn to pay for mistakes it's all a different matter.

When RBS went down the toilet it took them 5 minutes to bail everyone out. Didn't hear anyone complaining about that. And the bosses are still getting huge bonuses!!

All we want is our money back.

We are not asking for hand-outs. It is simply what is owed.

I certainly won't be putting any more money into pensions, it's the biggest con going.

@ Equitable Life victim

It's your last sentence that sums up the real tragedy of this whole debacle.

Pensions are simply a tax wrapper for holding assets. They still make sense for higher rate tax payers who want to put earnings aside for future delivery.

The fact that you (and many others) now hold a grudge against a tax wrapper is the real tragedy here because it defies all logic.

People make mistakes. That's why they put rubbers on the end of pencils.

Yours was to believe Equitable's marketing hype.

The true question here is; In an age of austerity, who should pay for your past mistake, you or the rest of us as taxpayers?

The hard fact of life is that the answer can only be; Mostly you and partly us.

Not one word about regulatory failure over a decade in these posts but I can read a lot of ignorance and hearsay. ELAS was the first failure of Brown's tri-partite light touch regulation. Had it been fully investigated at the time - instead of being brushed under the carpet - we may well have avoided a lot of things that happened in 2008. Regulation wasn't up to snuff in 2000 and it didn't improve after. Let theTories keep their manifesto promise - pay up in full to these impoverished retirees. R

Equitable life victim was making a good point until his last sentence, but there is a sense of injustice in his words that should be heard. EL victims have been wronged, end of. And before anyone else talks about greedy solicitors and accountants then remember that every single one of us is greedy. And that includes milkmen, plumbers (if you can find one), the prime minister, a shelf stacker at Tesco, IFAs ( yes, even us), and even the local vicar. Accountants and Solicitors haven't cornered the market in greed (yet) as far as I know so enough of the self righteous nonsense. Let him who is without greed cast the first claim for compensation.

Unlike some contributors, who perhaps due to the nature of their comments prefer to remain anonymous, I write under my own name.

Those who suggest that EL victims are well off, that their own greed in investing directly with a Lifeco that did not utilize IFAs brought about their misfortune, that they should have been better informed concerning the financial industry in general, should ensure that they have their facts right before condemning out of hand those who have lost so much. They show not only lack of compassion, but downright ignorance of what the EL issue is actually about.

Firstly, the vast majority of EL victims - because victims we indeed are - did not lose "savings" because we invested unwisely in the markets. What we have lost is our PENSIONS, money that we invested over many, many years, in the oldest, most trusted Mutual in the world, in order to provide ourselves with income in retirement. Many of us were, like me, self-employed. We were not therefore able to benefit from generous Public Service pensions of from any of the Occupational Pension schemes that operated in the 70s, 80s and 90s. Had we not made very significant sacrifices of income when we were working in order to be self-reliant in retirement, we would have been utterly dependant in our old age on the State. Many of us, indeed, now wish that we had made the choice to be far more self-indulgent while we had the cash, spending our all on our children and other dependants and on riotous living rather than handing it over to a Lifeco that, we now know, was systematically "cooking the books" continuing to operate under the evidently unwatchful eyes of successive Government Regulators. Every "product" sold by EL bore the approved Government Regulatory Logo.

The facts are that there was the most appalling Regulatory failure by a Government Department - the Treasury. This failure has been denied over more than a decade by successive Governments despite the fact that the Parliamentary Ombudsman found that it had indeed occurred. In the face of the Labour Gvt.'s refusal to award compensation following publication of her Report, the Ombudsman's findings were upheld by the Parliamentary Public Administration Select Committee. Their Report to Parliament was entitled "Injustice Unremedied" - a not insignificant title, particularly perhaps when one considers that their then Chairman was a Labour MP!

The ongoing refusal of Labour Governments and, it now seems, of the new Coalition, to acknowledge the extent of the wrong done to tens of thousands of decent, hardworking UK citizens and accordingly to make good that wrong, is probably the most deplorable scandal in the UK's financial industry for more than a century. If the present Government wants UK citizens to make financial provision for their retirement years, then it is up to Gvt. to demonstrate that money saved by the individual citizen for retirement is safe. Gvt. can best do that by compensating EL victims adequately for the losses they sustained through failure of a Government department. Until or unless that compensation is forthcoming, I would say to anyone who is currently paying out of their own earnings into a pension plan, "caveat emptor". You could well lose the lot!

ELAS policyholders are claiming £4billion to £4.8billion because that is what has been verified by the latest Chadwick report as the loss.

The reason they are claiming against the government is because several government agencies over a ten year period failed to tell policyholders of several major problems with the finances and strategy adopted by ELAS management.

The regulators were aware that a reassurance scheme used to fudge the financial health of the society was never valid (it was just a side letter with no legal basis) and they were therefore co-conspirators in deception (possibly fraud).

The regulators hoped that ELAS would trade its way out of trouble, but the lost GAR case and stock market crash exposed all the problems.

Professional advice would have been no use. IFAs never took any interest in ELAS because they couldn't sell the policies and if they had looked at the accounts they would have been misled because the accounts were "fixed". The regulators had a different set of accounts and were aware of problems.

Along with my business partner I created, built up and ran a manufacturing company for over 20 years but had to sell it after his early retirement due to ill health. In other words, we employed people, contributed to the economy, paid our taxes.

Over most of this time we had this business we saved for our old age by investing in Equitable Life pension Policies. Not only that, but to my deep shame, encouraged our employees to do likewise. On my retirement I was sold a with profits annuity which was recommended to me by Equitable Life. At the time I was lead to believe that this type of annuity would protect me from the ravages of inflation It hasn't, in fact just the opposite, payments to me have declined every year and are now 50% less than they were when Equitable closed for new business in 2001.

Equitable Life was near to insolvency at the time I bought this policy, a fact know to Equitable Life, the Government Regulators and to the Companies Accountants but not to the general public.

For the last 10 years of this financial scandal we victims have seen an enormous cover up orchestrated by Gordon Brown whose stealth tax on Equitable and other pension providers has seen the collapse of private pensions in the UK.

Both the Conservatives and the Liberals promised that everything would change if they were elected and that the Parliamentary Ombudsman’s report on compensation would be implemented; £4.8 billion was the sum she concluded we all had lost. These are hard times but to offer us £400 million is an insult.

If a Company is regulated by HM Government the general public has a right to expect them to do the job. To me these words mean the Company is secure, can be trusted. In case of Equitable Life they meant no such thing. The Regulators connived in the stealing of my money and that of all the other 50,000 with profits annuitants which was then used to keep the Company afloat. It has since been revealed that in its later years Equitable was a giant Ponzi scheme overseen by the Regulators.

This payment offer is derisory. and 10 years on it seems I may soon join the others who have died waiting for some sign of decency, some sign of morality from the UK Government.

All this despite well over half the back bench MP’s being in support of our case and the Ombudsman’s recommendations. It makes a mockery of the Office of the Parliamentary Ombudsman and it makes a mockery of our so called Parliamentary Democracy.