Equitable investors face further delays

Government apologises as it considers compensation

The Government finally offered an apology yesterday for its mishandling of the regulation of Equitable Life, but was attacked after failing to say when it would provide compensation for some of the thousands of policyholders who lost out as a result of itscollapse, or how much.

Speaking to the House of Commons yesterday, the chief secretary to the Treasury, Yvette Cooper, conceded that the Government had been guilty of maladministration during the 1990s and the early part of the current decade, and would now look to compensate those who had been "disproportionately" affected by the insurer's demise.

"I think the whole House regrets the mismanagement of the Society that caused problems," she said. "And I wish to apologise to policyholders on behalf of the public bodies and successive governments responsible for the regulation of Equitable Life between 1990 and 2001, for the maladministration we believe has taken place."

The apology and promise of compensation comes more than eight years after Equitable's collapse – during which time more than 30,000 of those who might have qualified for financial support have died.

Ms Cooper said the Government had appointed the Lord Justice of the Court of Appeal, Sir John Chadwick, to consider what proportion of policyholders' losses were incurred as aresult of maladministration.

Once Sir John's report has been finished, Ms Cooper said, the Government would set up a scheme to make payments to those who had lost out.

But she stressed that the state of the public finances would have to be taken into consideration when deciding on the size of the payments, and to whom they should be paid.

Policyholders angrily criticised the Government's proposals, pointing out that thousands more people would now die before being compensated.

Paul Braithwaite, general secretary of the Equitable Members' Action Group (EMAG), said: "EMAG is appalled to see that after eight years of delay and dissembling the Government has kicked the issue of compensation for proven injustice into the long grass yet again. This cynical manoeuvre will ensure that many more pensioners die without obtaining the fair redress that the Parliamentary Ombudsman called for.

Referring to the Financial Services Authority, Braithwaite said, "The Government's statement shows that the words 'Regulated by the FSA' on your pension policy are a worthless fantasy. Buyer beware: there is no protection for pensioners in the UK. It's no wonder there's no trust. In our view, 100 per cent failure should demand 100 per cent compensation – not a discretionary handout."

The Conservative Party also criticised the Government, saying it was ignoring the recommendations of both the Parliamentary Ombudsman and the Public Affairs Select Committee in its approach to paying compensation.

"We welcome the fact that the Government has finally admitted failings and will compensate thevictims of the Equitable Life fiasco. But we are disappointed that the Government has torn up the Ombudsman's timetable for compensation, and there is no guarantee when policyholders will receive any payments for the losses they have suffered," said Mark Hoban, the shadow financial secretary.

Case study: "We will continue to fight"

Ann Berry, a 70-year old retired physiotherapist from Sussex, is still suffering from the collapse of Equitable Life eight years ago.

Back in 1998, she used all four of her personal pensions to buy a with-profits annuity with Equitable, which promised to pay her an annual income which would grow each year. After the Society's collapse, however, her income collapsed – and she now estimates that she is receiving around 50 per cent less every year than she would have done had the insurer not hit the rocks. As a result of her much reduced pension she was recently forced to sell her home, buying a smaller and cheaper property which is not big enough to accommodate her family when they come to visit.

"I had to move into a small bungalow just so I could release enough capital from my property to live," she says. "I know that I'm lucky to have a house, but this is not what I thought I was signing up to when I bought my annuity with Equitable 10 years ago."

Ms Berry said she was very disappointed with yesterday's statement by the Government, and said she was still not convinced that she would see any compensation. "We're not going to give in," she said. "We'll continue to fight."

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...

Day In a Page

General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence
Public relations as 'art'? Surely not

Confessions of a former PR man

The 'art' of public relations is being celebrated by the V&A museum, triggering some happy memories for DJ Taylor
Bill Granger recipes: Our chef succumbs to his sugar cravings with super-luxurious sweet treats

Bill Granger's luxurious sweet treats

Our chef loves to stop for 30 minutes to catch up on the day's gossip, while nibbling on something sweet
London Marathon 2015: Paula Radcliffe and the mother of all goodbyes

The mother of all goodbyes

Paula Radcliffe's farewell to the London Marathon will be a family affair
Everton vs Manchester United: Steven Naismith demands 'better' if Toffees are to upset the odds against United

Steven Naismith: 'We know we must do better'

The Everton forward explains the reasons behind club's decline this season
Arsenal vs Chelsea: Praise to Arsene Wenger for having the courage of his convictions

Michael Calvin's Last Word

Praise to Wenger for having the courage of his convictions