Equitable Life savers to start receiving payments

SAVERS that lost their money in the collapse of life and pensions firm Equitable Life will receive compensation payments from June, the Treasury said yesterday.

Policyholders at the firm will share £1.5bn from the government after a ten-year battle to recoup savings lost when the firm collapsed in 2000.

The repayment scheme will be managed by the government’s investment provider National Savings and Investment (NS&I) and offer £775m to about 945,000 policyholders, with another £620m to be allocated to 37,000 with-profits annuity holders.

“This is a complex issue, but the scheme has been designed to reflect the principles of fairness, transparency and simplicity,” said Mark Hoban, financial secretary to the Treasury.

Oldest policyholders will be paid first, with savers paid £500m in this financial year; £300m in 2012-13 and £200m in 2013-14.

But any policies taken out before 1 September 1992 will not be compensated, while around 100,000 policyholders will receive nothing as they are deemed to have lost less than £10.

The government has estimated savers’ total loss at £4.2bn but said it cannot afford to pay that amount.