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The independent action group for current and ex Equitable Life policyholders, funded by contributions. Equitable Members Action Group Equitable Members Action Group Limited, a company limited by guarantee, number 5471535 registered in the UK |
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The independent action group for current and ex Equitable Life policyholders, funded by contributions. Equitable Members Action Group Equitable Members Action Group Limited, a company limited by guarantee, number 5471535 registered in the UK |
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EMAG F.A.Q.
What is the Equitable Life scandal?The Equitable Life Assurance Society closed to new business in 2000 after a House of Lords ruling required it to honour the guaranteed bonuses it had promised to policyholders. The ruling exposed a black hole in the Society's finances – forcing it to acknowledge that policyholders' pensions were worth far less than they had been told, resulting in over a million people suffering significant losses. Who is responsible for the losses?While the management of the Society failed in its responsibilities, effectively creating a ‘Ponzi scheme’, the Parliamentary Ombudsman concluded that victims' losses were directly attributable to a decade of serious, serial regulatory maladministration. Put simply, the regulators of the Society failed to protect pensioners and savers. Those regulators included the Treasury. What did the Parliamentary Ombudsman recommend?Following a detailed investigation, in 2008 the Parliamentary Ombudsman recommended that a payment scheme should be created “to put those people who have suffered a relative loss back into the position that they would have been in had the maladministration not occurred.” How much have Equitable Life victims lost?In 2010, the Government accepted that victims' losses amounted to £4.3bn, but only allocated £1.5bn for compensation – a decision it justified, at the time, on the basis of the perilous state of the public finances. Who has received some compensation to date?In 2011 the Government allocated £620m to those already receiving an annuity (covering a claimed “100%” of their assessed relative losses), leaving just £780m to share amongst one million other victims, and a £100m contingency. This means the vast majority of victims have only received 22% of the money they had lost because of a decade of failure by the Treasury and financial regulators. The Government also decided that only With-Profits Annuitants who took out their annuity after September 1992 would be eligible for full compensation. After further campaigning by EMAG, With-Profits Annuitants who took out their policies before the September 1992 cut off were given ex-gratia payments of £5,000 (or £10,000 if they were in receipt of Pension Credit). Have the payments that have been made been accurate?There is serious doubt over the accuracy and reliability of the methodology used by the Treasury to calculate what's owed. EMAG has uncovered several cases involving policyholders who were significantly under-compensated for their losses due to errors in the Treasury's calculations. Of 160 upheld complaints about inaccuracies in the Treasury's methodology, only eight received recalculations. In all eight cases, recalculations resulted in increased payments made to the policyholder. In one case losses were calculated as £17 when they were in fact £8,661. EMAG is calling for an inquiry by the Public Accounts Committee into the accuracy of the calculation of individuals' losses. Can I still make a claim for compensation?Against our wishes, the Government's payment scheme has been closed for new claims. This is despite the Treasury failing to trace over 100,000 policyholders. If enough of these policyholders had come forward and joined EMAG we would have campaigned for the scheme to be reopened for new claimants. What is EMAG campaigning for?EMAG is campaigning for:
How much will full compensation now cost?Covering the unpaid balance of losses due to the 895,000 victims would cost £2.6bn. This does not include any interest or uprating for inflation. Fully compensating the 9,000 most elderly and vulnerable WP annuitants who were unfairly excluded from the original payment scheme would cost around £100m. £140m of the originally allocated £1.5bn remains unspent and could be released immediately. Is full compensation affordable and fair on the taxpayer?Over £350bn has been made available almost overnight in response to the coronavirus pandemic. During the 2008 financial crisis £133 billion of taxpayers' money went into preventing the banks from failing. According to the NAO £76 billion is still to be recouped. Freezing fuel duty for one year ‘costs' the Exchequer £2.7bn over five years. Availability of money is not the issue – it comes down to the political will to do the right thing. Equitable Life savers did the right thing and they were badly let down by the government and regulators. The sums sought are acknowledged losses and a debt owed to responsible people who worked hard and saved prudently for their retirement. How can it be delivered?The Government can borrow the money now and write it down over 5 years. It can take the last known address it holds for policyholders and send a cheque for the missing 77.6%. The Treasury have the addresses of all those who they paid and have already done the calculations. They just have to take the individual's loss figure, subtract the amount already paid and send a cheque for the balance. The Government also already has the details of the WPAs who received ex-gratia payments in the past. What is the typical size of the pension pot of an Equitable Life victim?The largest cohort of traced victims (736,000 people) had less than £20,000 in their pension pot. Another 158,000 traced people had larger pots and have lost more. Many of Equitable's savers and pensioners were nurses, teachers, civil servants, shop workers and postal workers, plus some small business owners. What has been the impact for Equitable Life victims?The impact of the losses has been huge. Watch this video to hear how it has affected the With-Profits Annuitants unfairly excluded from compensation: A video of victims who have only received 22% of their money back can be viewed here: Other victims' stories can be viewed on our campaign website here. How can I join or support the campaign?If you or a family member have been affected by the Equitable Life scandal, or if you simply think it's wrong for the Government to ignore its moral obligations, you can join our campaign here. You can also get involved by joining a regional group or show your support by contacting your MP easily and directly via our campaign website. |
