No Equitable policyholder pay-outs until next year

Policyholders who lost money in Equitable Life will have to wait until next year before they receive any compensation, the Government said today.

The Treasury also warned that the overall size of the compensation fund would be considered "in the light of what is affordable" as part of October's spending review.

It is also possible that the final redress pot could be just one tenth of the sum that policyholder action groups estimate Equitable members have lost.

The news came as Financial Secretary to the Treasury Mark Hoban introduced a bill to Parliament which will enable compensation to be paid to policyholders.

He also announced details of the Independent Commission which has been set up by the Government to advise it on the best way to allocate payments to people who lost money in the society.

Mr Hoban said the commission would start work imminently, so that it could begin making payments as soon as possible, but he added that it is not expected to report back until the end of January next year.

As a result, policyholders are not expected to learn how much they will receive until later in 2011, which will be nearly three years after the Parliamentary Ombudsman first called for people to be compensated.