Updated 20 June 2014
Recovery allows us to revisit derisory Equitable payouts
Victims are going to their grave, keenly feeling the injustice. We owe it to society to think again.
Equitable Life, remember them? The world's oldest mutual went pop in 2000 leaving hundreds of thousands of policyholders with a far poorer retirement. Nearly a decade and a half on you could be forgiven for believing from what you read — or more correctly don't read anymore — that Equitable Life has been addressed after the coalition government did put together a package of compensation for policyholders at the cost of up to pound;1bn. But here is the problem a £1bn isn't anywhere near enough to put people back into the position they would have been had they never invested in Equitable Life. After all, it has been clearly shown that regulators were negligent and even potentially culpable in allowing the Equitable to get into the dire straits it did during the 1990s.
I met with some Equitable Life members just the other day and they feel that that they are no longer being heard and that all because a ‘compensation package’ is out there our media culture, which has the shortest of short term memories, has moved its gaze elsewhere.
They are right. Put Equitable Life into the news search on Google and you get virtually no recent hits. But when you hear these people's stories you know that a fundamental wrong has not been addressed, not even slightly. In some cases the compensation has given people less than 15 per cent back of what they lost. All the while the frustration and anger grows and more and more policyholders go to their graves feeling keenly the injustice.
Why am I then writing this now? Well at the time that the compensation package was announced it had a rather large caveat put on it and it was to do with the government finances. As a nation we were in a dire financial state. Back in 2010 I wrote in this column that the UK probably only had a 50–50 chance of avoiding a catastrophic default. However, we have been lucky for a number of reasons and the latest government tax take figures show that the Treasury is now taking in more money than ever before and at the same time the economy is growing at a far faster rate than many predicted. In short, the nation's finances are coming out of the emergency ward and into the recovery room.
I think therefore, this would be a good time right now to revisit the compensation given to Equitable members many of whom are in their 70s, 80s and 90s and really need the money — it could actually stop some people from being a drain on the state's coffers.
It could be done relatively easily, we know how much each policyholder has lost and where they are a simple ex gratia payment — even if didn't give 100 per cent money back would suffice. It would be a further recognition of the wrong that was done them by the regulators. I can understand why the decision was made to cap compensation back in 2010 but for the sake of our society, now is the time to look at it again.
Julian Knight, Personal Finance Editor, Independent on Sunday, 1 June 2014
(Julian is the Conservative candidate for the May 2015 general election, seeking to replace the current MP, LibDem Lorely Burt)
Dates for your diary
EMAG will be holding a major Rally at Westminster Central Hall at lunchtime on Wednesday 22nd October.
Further, the EMAG AGM which will be our fifteenth, will move back to London for 2014 and be held again at the National Liberal Club in the early afternoon of Wednesday 19th November.
EMAG's recent survey of members
EMAG recently conducted an online survey of our members' attitudes. Nearly two and a half thousand members responded. It showed that 85% are dissatisfied with their 22% compensation payment and 99% want to campaign for the missing 78%.
- Non–WPA (getting 22%) — 85% dissatisfied with their payment.
- Post 92 WPAs — 62% dissatisfied with their payment.
- Pre 92 WPAs — 72% dissatisfied with their payment.
This demonstrates graphically the profound dissatisfaction of the vast majority of Equitable Life policyholders with the paltry payout to non WPAs, which was set in the dark days of October 2010 at just 22%. It's time for the government to put this right. It could even be a vote winner for them!
Dr Ros Altmann honoured
On the 14th June the lead activist for the Pension Action Group (PAG), Ros Altmann, was honoured with a CBE for her years of determined service to seek compensation for occupational pensioners with ASW and others, which led to the setting up of the Financial Assistance Scheme (FAS).
EMAG congratulates a fellow campaigner on this well deserved recognition!
The APPG and the PAC
The Equitable Life APPG met on 29th April. The Rt Hon Margaret Hodge MP, chair of the Public Accounts Committee (PAC) had an interesting dialogue with MPs and EMAG, following her committee's report on Equitable Life in July 2013.
The direct consequence was that the PAC called back the Treasury and NS&I witnesses before the committee on 12th May. EMAG's Paul Braithwaite attended. Read the minutes and observe how the Inland Revenue's director of business and international tax, Mike Williams, answered.
EMAG found Williams' testimony incomplete and wrote again to Margaret Hodge pointing out these deficiencies, on 30th May.
Equitable Life's AGM
Equitable Life's AGM was held in London on 19 May. The number of attendees was up, due to members wanting to understand better the prospective ramifications of the forthcoming relaxation in access to pension savings. Once again, chief executive Chris Wiscarson has passed on his bonus entitlement — in sharp contrast to his predecessor, carpet–bagger Charles Thompson, who took £1 million pound plus annually from Equitable Life in its darkest years. The society is now stabilised and ongoing members are receiving boosts to their policy fund values. 80% of the WP fund apparently has a 3.5% GIR guarantee — valuable in the recent years of ultra–low interest rates.
EMAG Regional Roadshows
Since last summer EMAG's regional co–ordinator, Chris Harlow, and his team have completed three dozen regional meetings with thousands of EMAG members up and down the country.
The workshops have set up hundreds of EMAG constituency groups of volunteer committees and activists. Each group has the goal to engage their particular MP in a dialogue, by post or face–to–face, and to make sure the MPs understand that they each have hundreds of dissatisfied Equitable Life constituents.
Many EMAG members have been frustrated to find their MP acting as ‘postman’, writing on their behalf to the Treasury and then forwarding the carefully crafted standard ‘cookie cutter’ responses back to them, thinking the job is done.
But EMAG members should be persistent and convey that if the MP fails to seek to persuade the Treasury to pay the balance of the £2.8 billion unpaid debt for maladministration, they risk losing the support of thousands of victims and their families at the May 2015 general election.
They should also point out that the Government's only reason for paying us just 22p in the pound was the state of the economy in October 2010. Now that the economy is improving, that argument no longer stands up.
And why should we be treated differently from savers with Northern Rock, Icesave, Bradford and Bingley, Halifax or RBS who all got 100% of their savings protected or reimbursed? The flimsy ‘systemic risk’ argument used by the Treasury is wafer thin.
But nobody is going to write a cheque if EMAG members don't make their anger felt. 2014 is the year when we could turn a little effort into a lot of money.
If YOU want the rest of your money back – DO something about it! Contact your MP and let him/her know what you think!
If you would like to join your local EMAG group, please contact Chris Harlow on firstname.lastname@example.org