The Government have announced that investors who lost money with the assurance society will start to receive compensation as early as next month.
Priority will be given to those receiving ‘with-profits’ annuities, older policy holders and relatives of policyholders who have since died (whose numbers are around 50,000). Out of these groups of investors however, only the annuity holders will be given full compensation.
Victims of the near collapse of Equitable Life in 2000, saw their investments decrease by up to a half and were unhappy at the Government’s announcement that they would only get back less than a quarter of the total they lost. Anyone who is eligible for a payment of less than £10 will receive nothing. In total Equitable Life victims will receive around £1.5 billion.
The Equitable Life compensation will be tax free and not means-tested. It won’t affect anyone’s eligibility for tax credit, although the money could be taken into consideration when other state benefits are applied for.
The compensation scheme is aiming to contact all eligible policyholders by June 2012. They will be sent a statement explaining the value of their compensation and details of when they will receive it, should they qualify. The Treasury has declared that payments may be able to be brought forward if grounds of hardship can be proven, regardless of circumstances.
Financial secretary to the Treasury, Mark Hoban said the compensation scheme had been designed to reflect “the principles of fairness, transparency and simplicity”, adding “Having spent a great deal of time in dialogue with interested parties, the Government is now approaching the final stages of preparation before the [compensation] scheme begins to make payments to policyholders. The Government’s ambition is for these payments to begin before the end of June.”
The compensation scheme is being administered by the National Savings and Investments (NS&I), and the Treasury has advised that policyholders do not need to take any action at this stage.
Related Posts :
