Equitable Life policyholders to get extra £2,000 payout
There was some good news yesterday for 345,000 policyholders in Equitable Life, the mutual insurer which almost collapsed in 2000. It revealed that policyholders who stuck with it will receive a 25 per cent boost to their payouts.
The group said the capital distribution on 1 April could top £750m, giving the average policyholder an extra £2,000 payout.
Troubles hit the insurer – which had been formed in 1762 – at the turn of the century after it was brought to its knees by a misguided promise of guaranteed annuities, which it had no realistic chance of fulfilling.
Its attempts to resolve the problems by changing the terms of the guarantee was challenged in court. The case culminated in 2000 when the House of Lords ruled against Equitable, ordering it to honour the guarantee.
The company could not afford to do so and was forced to close its doors to new business in 2001. Subsequent investigations revealed cases of mismanagement by Equitable.
The whole business left fed-up policyholders facing a decade-long battle to win compensation from the Government. Eventually, in 2012, a compensation scheme began paying out to affected policyholders, but only offered around a quarter of their losses. Now, nine out of 10 of those who remained in the society will have ended up with a higher payout than the guaranteed return they were offered.
Chris Wiscarson, Equitable Life’s chief executive since 2009, said: “Over the past decade, there have been many reasons for policyholders to leave the society, but one big reason to stay. This is it.”
The announcement means a with-profits policy with a transfer value of £10,000 on 1 April 2013 will have an equivalent value on 1 April 2014 of £11,930.
Insiders suggested there could be further distributions, which policyholders would lose out on if they left.
Danny Cox of Hargreaves Lansdown said: “Policyholders who have stuck with the Equitable have finally been rewarded. Those who have felt trapped by poor returns can now head for the exit with as much as 30 per cent more in their pocket. Importantly, any right to compensation will be retained.
“However, some policyholders may also choose to stay with the Equitable Life to benefit from any increase in the size of future surplus distributions.”
- 2 Disney heiress Abigail disowns her share of family profits in West Bank company
- 3 The secret report that helps Israel hide facts
- 4 Israel's propaganda machine is finally starting to misfire
- 5 'Hello mum, this is going to be hard for you to read ...'
Sally Farmiloe dead: Howards' Way actress, and former mistress of Jeffrey Archer, dies aged 60
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Disney heiress Abigail disowns her share of family profits in West Bank company
Australian model Robyn Lawley stages naked protest against huge coal mine seven times the size of Sydney Harbour
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...