Equitable Life losers set for £1.5bn payout
Victims of the near-collapse of insurers Equitable Life look set for a more generous payout than expected, it has emerged.
Chancellor George Osborne will use Wednesday's Comprehensive Spending Review to announce compensation amounting to around £1.5 billion to policyholders who lost pensions and savings, according to the Daily Mail.
The sum is more than three times the maximum £400-£500 million payment recommended by former Appeal court judge Sir John Chadwick, who was appointed by the last government to determine compensation.
More than one million policyholders lost out when Equitable Life came close to going bust in 2000 and they have fought over the past decade for recompense.
Many have died waiting for compensation and it is understood that their relatives will benefit from the payout to be announced next week. It has been estimated that up to 15 of the policyholders die each day.
According to the Mail, Mr Osborne will announce up-front payments of around £1 billion in next week's spending review, while a further £500 million will be made available in annual payments to with-profit annuity holders until their death.
It is expected that the first payouts are to be made next year as it will take several months to set up schemes for paying the compensation.
Criticism is expected from some of those affected however, with the compensation package agreed being less than the relative loss of the policyholders.
Up to half the value of policyholders' pensions and retirement savings was wiped off after Equitable admitted it could not afford to pay out the bonuses it had promised.
Treasury sources declined to comment on the report.
Liz Kwantes, of the Equitable Life Members Support Group, said that policy-holders had not yet been informed of any compensation settlement.
And she said that, even if the £1.5 billion figure was confirmed, it would fall well short of the £4 billion-plus lost by Equitable Life customers. The sum proposed by Sir John Chadwick had been "derisory", she said.
Ms Kwantes told BBC Radio 4's Today programme: "We are still being asked for a cut of nearly 70%, which is a lot more than anybody else is being asked to make.
"It was absolutely laughable, the derisory amount they offered originally. I don't know if they believed anybody would accept what they were suggesting."
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