Letter from EMAG to the Minister, 18th December, 2013
Parliament breaks tomorrow and I want to put on record before that, EMAG's thanks to you personally.
This week I have had literally dozens of thankyous from EMAG members who are pre–1992 WP annuitants — several expressing the view that they didn't expect to live to see any compensation.
In the 15 months you've been in charge of compensating Equitable Life's victims you have listened, taken an interest and made valuable interventions. These have been appreciated by Equitable policyholders and EMAG has given you plaudits for your achievements to date.
EMAG must also give great credit to the 186–strong APPG under the committed leadership of Bob, Fabian and Stephen. They too have played a pivotal part in breaking the log-jam that was engendering hostility to the Coalition.
EMAG recognises that you could easily have left our plight to the new Economic Secretary and we appreciate that you chose not to.
A big thank you, particularly on behalf of the 9,000 WPAs who you ensured received their tax–free £5000 payments this week.
EMAG looks forward to continuing to work constructively with you in 2014.
General Secretary of EMAG
Treasury to pay £50m in Equitable Life compensation next week.
The Treasury will pay out £50m in Equitable Life compensation next week after the Autumn Statement revealed payments would be made earlier than expected.
Speaking at Treasury questions yesterday, Treasury financial secretary Sajid Javid fleshed out details of the payments timetable and revealed 9,000 people would take home £5,000 each next week. A further 450 people in receipt of pension credit will receive an additional £5,000.
The Treasury had been aiming to make payments by next April but Equitable Life annuitants will now receive the cash in time for Christmas.
In June 2011, the Treasury began distributing compensation to Equitable Life policyholders who annuitised after 1992. It is being operated by National Savings & Investments, which has paid out £734m of a total £1.5bn provision for payment to policyholders.
In April this year, the National Audit Office warned the Government it should extend the deadline to pay policyholders because it was too short, and the Government had failed to prepare sufficiently beforehand.
In July the Public Accounts Committee chair Margaret Hodge slammed the ‘unacceptable’ Treasury handling of the scheme and claimed up to 20 per cent of policyholders could miss out.
The Government has since extended the payout deadline from April 2014 to April 2015 to ensure people are compensated..."
Money Marketing, by Samuel Dale 11 Dec '13
Equitable Life plan extended by a year
The £1.5 billion Equitable Life compensation scheme has failed to track down more than 400,000 account holders, prompting the Government to extend it for at least another year.
Sajid Javid, Financial Secretary to the Treasury, said yesterday that the Government was poised to run a national advertising campaign aimed at prompting eligible policyholders to come forward.
Hundreds of thousands of investors risk losing out on payments that average £1,339 but could be considerably higher because the mutual pension provider supplied incorrect contact details or no address at all to the scheme's administrators. In some cases, the address details handed over were 20 years old, the Treasury said.
The Equitable Members Action Group, the campaign group that led the call for financial redress, offered the department an up-to-date CD with 250,000 correct names and addresses two years ago. However, the Treasury refused to use it amid concerns that it would breach rules on confidentiality and privacy.
The campaign, which will feature advertisements online and in newspapers, will start in the next few weeks, the Equitable Life Payment Scheme said yesterday.
Mr Javid said that the scheme would be extended until the middle of 2015. It had previously been expected to close next April.
‘The Government has allocated up to £1.5 billion to help the policyholders of Equitable Life who suffered an injustice, with hundreds of thousands of policyholders receiving £700 million in payments since 2011,’ he said.
‘We've made strong progress, but we want to maximise the number of people who will eventually receive payments.’…
Paul Weir, a spokesman for EMAG, said that the group had pressed for the scheme's deadline to be abandoned, including at a meeting of the all-party group of MPs working on behalf of policyholders.
Mr Weir said: ‘We are delighted that the Treasury has listened to EMAG and the all-party group. It is vital that the Treasury complete the task of tracing those who are entitled to compensation and we will be working with them to assist that process,’"
Miles Costello in The Times 10 October, 2013
From the oral evidence session of the Public Accounts Committee (PAC) on 15 May, 2013:
Committee Chair Margaret Hodge MP to Mike Williams, Director, Business International Tax and the Treasury's senior responsible officer for the Equitable Life compensation scheme:
Q 74: "Mr Williams, you are just not getting what we are saying. Unanimously round this table we think individuals have the right to understand how their calculation was made. We will come to the timing. We think they have that right, and we are pretty cross with you that you are not administering a scheme that gives them that right. We think you should go and sort that out and just make sure that from here onwards people can get some understanding of why a particular sum was reached.
It is not very difficult. I just don't believe there is anything in the world that has to be so complex that people don't understand how you got there. I just don't buy that-I don't think any of us buy that. You can take that as a comment. It will be a recommendation, and you will be back here if you don't implement a scheme that allows that to happen."
Read the uncorrected transcript of the oral evidence session 15 May to the Public Accounts Committee
Read Ian Cowie's article in the Daily Telegraph, 16 May
£1.5bn payout chaos to Equitable Life policyholders is truly shameful.
The Mail on Sunday has long known that the £1.5billion payout to just over a million Equitable Life policyholders hit by the near-collapse of the insurer 13 years ago is being badly handled.
Rarely a week goes by without correspondence from at least half a dozen Equitable customers. All of them are elderly, many frail, and all complain they have either not received compensation, or if they have it is less than expected. Most of those who have challenged National Savings & Investments, which is handling the payments for the Treasury, complain of a robotic response to correspondence and complaints, with specific queries ignored.
The financial services industry is renowned for substandard customer service, so we should not expect any better from NS&I, but this is an appalling way to treat elderly people.
The National Audit Office last week confirmed the scale of this mess when it said that more than 660,000 payments had yet to be made (the intention was to make all payments by March next year) and that only a paltry 0.02 per cent of members of group pension schemes (where Equitable was the investment manager) had received compensation. More worryingly, it predicts between 17 and 20 per cent of policyholders eligible for compensation will never get their money because NS&I won't be able to track them down (presumably because they have moved).
Understandably, the report's findings provoked a furious response from policyholder pressure groups and some MPs who have campaigned for justice for Equitable Life policyholders.
Paul Weir of the Equitable Members' Action Group said it was inexcusable that so many savers had died before a penny of compensation was forthcoming while senior Tory MP David Davis implored the Treasury to do more – primarily kick NS&I up the backside – to ensure Equitable savers are "treated as fairly as possible, after what has been a miserable experience for them".
Margaret Hodge, chairwoman of the Commons Public Accounts Committee, said it was ‘disgraceful’ so many savers would not receive compensation because of NS&I's failure to find them. ‘These conscientious savers should not lose out,’ she said.
I do now hope the NAO report spurs the Treasury and NS&I into overdrive. It is bad enough that policyholders were kept waiting more than a decade before Government acknowledged they had a right to compensation.
But to dangle compensation before their eyes and not hand it over is truly shameful.
Jeff Prestridge in the Mail on Sunday, 28 April, 2013
Payouts at last for 9,000 victims of maladministration at Equitable Life
George Osborne corrected a major financial injustice last week when he said about 9,000 victims of maladministration at Equitable Life would receive compensation after all, totalling £45 million.
They were controversially excluded from a £1.5?billion rescue package announced in 2010 to make good some of the losses policyholders suffered after the failure of previous governments and regulators to monitor the insurer, resulting in its near–collapse in 2000.
The Government's U–turn follows a sustained campaign over two–and–a–half years by Financial Mail to win justice for the 9,000, many of them now elderly and frail. Some, sadly, have died waiting in vain for justice.
Compensation of £5,000 will be paid to those who took out with–profits annuities with Equitable Life before September 1992 and who previously were excluded from recompense. A further £5,000 will be paid to those annuitants who are relying on Pension Credit to help them get through retirement.
Under the 2010 package, only post–September 1992 annuitants were eligible for compensation because the Government deemed them to have suffered from the fallout from maladministration while it argued unconvincingly that pre–September 1992 annuitants had not lost out, precluding them from handouts.
But work done by a former appointed actuary at Scottish Widows on behalf of the Equitable Life Members' Action Group disproved this division, confirming that all annuitants, irrespective of when they took out their policies, had suffered from maladministration.
Views on the compensation offered by Osborne among pre–September 1992 annuitants varies. Tony Fisk, 82, a retired entrepreneur from Southend–on–Sea, Essex, has seen the income from his annuity decline by 60 per cent since he took it out in October 1989. He is ‘appalled’ by the offer of a flat–rate £5,000 compensation. "It's a bone. It's a gesture, nothing more," he says.
Peter Beresford, 86, former director of a major food distributor, says the £5,000 is welcome. Peter, from Littlehampton, West Sussex, has watched his with–profits annuity diminish from just over £5,000 a year in 1991 to below £2,000.
Peter says: "I had given up hope that our just calls for compensation would be heard. I suppose something is better than nothing. I just hope that compensation is paid swiftly because none of us is getting any younger."
Mail on Sunday, by Jeff Prestridge 24 March, 2013.
Equitable Life investors to receive compensation
Policyholders with life insurance firm who bought with-profits annuity pensions before 1992 to be given at least £5,000.
A new wave of pensioners who suffered from the collapse of life insurance firm Equitable Life in 2000 are to be offered up to £10,000 each in compensation. The £45m payout will be funded using some of the extra money raised through increasing national insurance payments on members of defined benefit pension schemes.
Chancellor George Osborne said the government was under no legal obligation to make the payouts. "We are doing this because it is simply the right thing to do," he said.
Policyholders who bought with-profits annuity pensions before 1992 will receive payments of £5,000 with an additional £5,000 offered to those on lower incomes who receive pension credit.
Previously, only those who bought policies after 1st September 1992 were eligible for compensation.
Only living victims, not their estates, will get the payments, which will be made in 2014, or earlier if possible. Fewer than 10,000 people are expected to receive the latest round of compensation.
Paul Braithwaite, general secretary of Equitable Members Action Group, said: "Of course, £45m for those who had been left swinging in the wind is welcome. It is a little oasis of good news for old and frail people."
But Braithwaite said that the pensioners, now in their 80s, should have been compensated some time ago and the payout would only cover about 30% of their losses. He said even those who had previously been promised a payout were suffering from delays in the process...
The Guardian, Sarah Butler 21 March, 2013
Victims of the insurer's collapse are still waiting for their compensation from the Government...
The Treasury claimed it has paid nearly 80pc of individual policyholders and aims to have compensated all victims of the scandal before the end of next year. It is part of a £1.5bn compensation package agreed by the Government in October 2010.
But Paul Weir, a spokesman for the Equitable Life Members Action Group (EMAG) said that half of all the with–profits annuitants were still waiting for compensation.
"It beggars belief that the scheme has only managed to pay 6,000 with-profits annuitants since last July and left another 6,000 completely in the dark, waiting anxiously for the postman. We are fielding hundreds of inquiries from worried elderly annuitants, who cannot understand why they have not been contacted by the compensation scheme."
He added that while 80pc of individuals may have had a payment, the size of this compensation accounted for only one fifth of what they had lost. He also said that the vast majority — some 99pc — of those who invested in Equitable Life through a company pension scheme waiting to hear from the scheme. Around 500,000 bought Equitable Life pensions through a work-based scheme...
the Treasury's third progress report on the Equitable Life Payment Scheme said:
"Some 339,794 non with–profits annuitants have received lump sum payments totalling £426m and 30,997 with–profits annuitants have received their first payment totalling £54m.
"The scheme has also made payments to the estates of 5,760 deceased policyholders and continues to identify, trace and contact estates."
But Mr Weir said:
"We have also seen hundreds of the complaints sent to the scheme by policyholders who cannot understand how the figures were arrived at. They are met with a wall of obstruction and the handling of customer complaints so far has been abysmal."
Sunday Telegraph, 18 February 2013, by Ian Cowie
"...The Treasury's third progress report on the Equitable Life Payment Scheme, published today, acknowledged that nearly 6,000 compensation payments have been sent to the estates of deceased policyholders. It also claimed that many have received redress and the compensation programme is running to schedule.
A Treasury spokesman said: ‘Some 339,794 non with–profits annuitants have received lump sum payments totalling £426m and 30,997 with–profits annuitants have received their first payment totalling £54m...’
But Paul Weir, a spokesman for the Equitable Members' Action Group (EMAG), said: ‘It beggars belief that the scheme has only managed to pay 6,000 with–profits annuitants since last July and left another 6,000 completely in the dark, waiting anxiously for the postman...
‘Meanwhile, 99pc of more than 500,000 people in group schemes are still waiting to hear from the scheme. We have also seen hundreds of the complaints sent to the scheme by policyholders who cannot understand how the figures were arrived at. They are met with a wall of obstruction and the handling of customer complaints so far has been abysmal.’
Ian Cowie, Daily Telegraph 6 February, 2013
About minister Sajid Javid MP
"...Javid oozes self–confidence. You don't go from growing up in one of Bristol's poorest streets to being a vice–president of Chase Manhattan at the age of 25 without a lot of self-belief. He has no doubt that he can do the ministerial job. He is also not unaware of his own political advantages: ‘Because on my background and the challenges I have had and the job I have done before, I have worked with and had friends from every group of society. I don't think that's true of all politicians and that hopefully helps me empathise and connect with people facing problems at any point on the social ladder, whether they're a bus driver or an investment banker. I understand the issues and concerns they're facing."
James Forsyth in The Spectator: 24 Jan 2013