945,000 EQUITABLE VICTIMS GET 22% COMPENSATION
The Treasury has revealed that most of the victims of the problems at Equitable Life will receive compensation worth just 22.4% of their losses.
No compensation at all will be paid to 100,000 whose losses are put at less than £10 each.
The figures have been calculated by the Independent Commission on Equitable Life Payments which was appointed by the Coalition to distribute £775m allocated for most of the policyholders who had Equitable pensions.
37,000 of the most seriously affected, the so called With-Profits Annuitants, had already been promised full compensation.
Further details from Treasury:
* A pro rata allocation of the available funds, in proportion to the size of relative losses suffered. This equates to 22.4 per cent of non With Profit Annuity policyholders’ relative losses.
* A single policyholder view, wherever practicable, offsetting relative gains against relative losses for those that have more than one policy; and
* A minimum amount, in the region of £10, beneath which payments should not be made. This reflects the Commission’s view that administering very small payments below this sum would be disproportionate to the administrative costs of making them while being of negligible significance to recipients. The administrative cost of making a payment to those with individual policies is likely to be approximately £10 and may be higher for other policyholders.
The Commission recommends that, subject to practical constraints which are laid out in its advice, the following groups be prioritised in the order of payment:
* The oldest policyholders, as they are least able to wait for payment and are also least likely to be in a position to mitigate the effects of a delay; and
* The estates of deceased policyholders and, as far as possible, the estates of those who die, before receiving a payment, in the next three years. This prevents delays to beneficiaries receiving payments when they might be at their most vulnerable and reflects the difficulties that could arise from prolonging payments owed to the estates of deceased policyholders.
Further details from Treasury:
* A pro rata allocation of the available funds, in proportion to the size of relative losses suffered. This equates to 22.4 per cent of non With Profit Annuity policyholders’ relative losses.
* A single policyholder view, wherever practicable, offsetting relative gains against relative losses for those that have more than one policy; and
* A minimum amount, in the region of £10, beneath which payments should not be made. This reflects the Commission’s view that administering very small payments below this sum would be disproportionate to the administrative costs of making them while being of negligible significance to recipients. The administrative cost of making a payment to those with individual policies is likely to be approximately £10 and may be higher for other policyholders.
The Commission recommends that, subject to practical constraints which are laid out in its advice, the following groups be prioritised in the order of payment:
* The oldest policyholders, as they are least able to wait for payment and are also least likely to be in a position to mitigate the effects of a delay; and
* The estates of deceased policyholders and, as far as possible, the estates of those who die, before receiving a payment, in the next three years. This prevents delays to beneficiaries receiving payments when they might be at their most vulnerable and reflects the difficulties that could arise from prolonging payments owed to the estates of deceased policyholders.
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