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


Quotes - 2014

  • “Two wrongs that must be made right

    It is a fact of financial life that victims of wrongdoing – invariably hard-working, hard-saving citizens – do not always get the justice they deserve. Over the life of the current Government, two groups of investors badly wronged by the financial services industry, and those who regulate it, have not received satisfactory justice.

    They are investors in Equitable Life and Arch Cru, monstrous financial scandals of our time – indeed of any time. Speak to anyone who took out a savings plan with Equitable in the 1980s and 1990s and they will tell you they have been horribly let down.

    They saved diligently throughout their working lives to ensure they were not a burden on the State and to enjoy a retirement free from financial worry. But 14 years on from suffering catastrophic financial losses after Equitable nearly went to the wall as a result of mismanagement and regulatory failure, they are still waiting for justice to prevail. Although the present Government, unlike the previous Labour administration, agreed in 2010 to pay £1.5 billion of redress, it has still left nearly a million policyholders feeling short-changed. The compensation only covers a tickle over 20 per cent of the losses they incurred.

    Such an obvious case of financial injustice explains why many Equitable victims, most now in their 80s and 90s, continue to campaign ferociously for the wrongdoing done to them to be addressed satisfactorily... Equitable savers are being treated like second-class citizens, especially in light of the 100 per cent protection customers of bailed out banks received (quite rightly so) in the wake of the 2008 financial crisis. This monumental financial injustice remains a blot on the financial landscape. It is to the Government's great discredit that it hasn't removed it...”

    Jeff Prestridge in the Mail on Sunday, 27 December 2014

  • “My schoolboy error was to invest in a pension.

    …About 40 years or so ago, when I started earning decent money, my accountant asked if I had a pension fund. I don't look for advice from my accountant and certainly not from any financial advisers. Have you met any of them? Well then.

    He pointed out that there was a tax advantage in paying into my own pension pot, but it was up to me. I did the figures on the back of an envelope, trying to work it out. There was a tax advantage on the contribution, but what if I kept all the money, paid the tax, then invested it myself — bought a flat, say, or some Penny Blacks — would I not be just as well off?

    The accountant and all the clever-clogs I spoke to shook their heads at my stupidity. They explained that when I came to take the money from my pot, which would grow all the time, I would get 25% tax-free and the rest would buy an annuity — a pension for life. How good was that? The government clearly wanted you to do it, and had structured the laws accordingly. So, at the end of every tax year, I used to put away a large sum. It was a few years before I realised that once you had contributed to your pension pot, it was gone, no longer in your hands. I also hadn't realised that your annuity, when you took it, would be taxed. And when you died, anything left would belong to them, not you. My own stupid fault: starting it without fully understanding it…

    The Equitable had been going since 1762, had bishops and ambassadors among its 1.5m customers, so must surely be totally reliable. I had policies described as “with-profits”, wording I wasn't really clear about, but the nice suits explained that highs and lows would be evened out so I would always be sure of a steady return.

    Then one day, at the end of 2000, I heard the dreadful news. Equitable had run out of money and hit the rocks because it couldn't pay the promised annuities. There was confusion for a couple of years, then it emerged that the Prudential had taken over my annuities — but each year they went down by about 20%!

    I suppose that between us — for I put money in for my wife as well, saying “sign here, pet” — we had invested several hundred thousand pounds in the Equitable over 30 years. In the past year or so, we have had about £10,000 in compensation for the reduced annuities. This year, our annuities seem finally to have stabilised.

    I have drawn out a lot, by starting early, so I was luckier than some. But really, what a mistake. At least we are still working. Think of all the poor sods with no other income who planned to rely on the Equitable for their retirement years…

    None of our three children has a pension fund, partly because they are self-employed. One is a writer, one is a barrister, one is a designer. They have never had enough spare money, but partly I suspect it is because they have heard me moaning on about my pensions…”

    Hunter Davies in The Sunday Times 16 November 2014

  • Equitable compensation group in Commons bid. The campaign launched 13 years ago to win compensation for victims of the Equitable Life scandal has been ramped up ahead of the General Election.

    SEEKING JUSTICE: Actress Honor Blackman has a pension with Equitable Life and leads the campaign group.

    MPs from all the major parties will speak at a rally in Westminster's Central Hall today which is expected to attract hundreds of members of the 10,000-strong Equitable Members Action Group.

    EMAG is calling on the government to "settle its debt" to 945,000 Equitable Life savers who were paid just 22p in the pound of their losses from policies that crashed in value when the mutual society almost went bust in 2000.

    They had to share what was left of a £1.5 billion compensation fund after the government decided four years ago that it could not afford to reimburse the £4.3bn of identified policyholder losses, and that the lion's share of the fund would go to the 37,000 retirees already receiving their annuities.

    Paul Weir, EMAG committee member and spokesman who estimates his overall loss at £45,000, said: "If somebody had a cheque for £5,000 it just reminds them that they are still missing £20,000 of their own pension fund. With the economy on the mend, the Treasury should settle its debts."

    The group's case for compensation is based on a 2,800-page report in 2008 by the then Parliamentary Ombudsman Ann Abraham, which found the government guilty of maladministration and injustice in its supervision and regulation of Equitable Life.

    In a submission to MPs EMAG argues that the 945,000 past and present members are owed the balance of £2.8bn because Chancellor George Osborne had in 2010 accepted the ombudsman's finding but said that in times of austerity "a balance had to be struck between being fair to policyholders and being fair to taxpayers".

    During its nine-year campaign to achieve a pay-out, EMAG twice went successfully to the High Court to overturn government rulings attempting to head off the wide-ranging report into its ­administration. The Treasury had said such matters were "outside the ombudsman's remit" while the Financial Services Authority had insisted Ms Abraham was "highly unlikely" to prove maladministration.

    Mr Weir said the only reason given for not reimbursing losses in full had been "affordability constraints". He went on: "We think the time is now right to revisit that decision. The UK economy is said to be recovering and Equitable victims are not getting any younger. Many have died before receiving any payment. Equitable pensioners feel like they have received a down payment on a debt which has yet to be fully settled and which falls far short of the loss they have suffered to their retirement fund."

    Veteran actress Honor Blackman, who has a pension with Equitable Life and is EMAG's president, said: "After what happened to us, why would anybody in their right mind bother to save for a pension?"

    The EMAG report says: "The figure of £4.3bn is the agreed acknowledged debt for the failure of government regulators. The Court of Appeal this year ruled in favour of certain disabled people that had had their benefits reduced through government cutbacks, saying 'equality is not an option to be removed just because there are times of austerity'.

    "Nearly one million non-annuitant policyholders, acknowledged to have lost £3.5bn directly down to regulatory failure, have been short-changed thus far by a staggering £2.7bn. They've only been paid, after a decade-long fight, just over a fifth of their losses - not fair!"

    The group says payments could be phased over two or three years but there could be "no justification for closing the book on the Equitable Life saga.”

    Simon Bain, in the Herald Scotland 22nd October, 2014
  • The latest annuities scandal: The pensions that shrink to zero. Hundreds of thousands of people relying on investment-linked pensions for their retirement income are facing the terrifying possibility that their payments might dry up…

    A number of worried pensioners have written to the Telegraph with details of their continually shrivelling pension incomes from such policies. In some cases the annual reductions are small, but in the worst cases, pensioners in their 70s and 80s are now receiving incomes less than half their original pay outs.

    Most, but not all of the complaints, relate to the 50,000 policies of this sort issued by Equitable Life…

    To help make up for their dwindling incomes, and because government regulation was deemed to be partially responsible for the firm's downfall, the Government has been topping up the incomes of customers who bought Equitable Life with- profits annuities after 1992, using a complex formula to calculate how much individuals are missing out on compared to “typical” with-profits annuities.

    But Paul Weir, a director of the Equitable Members' Action Group (EMAG), the campaign group responsible for lobbying the Government over the course of a decade to get compensation for customers, says these payments are “insufficient” and typically only make up around half the losses most people are suffering every year.

    The Treasury has confirmed it has no plans to review the compensation, but the group is ramping up pressure on the Government to increase it by launching a fresh campaign which will include a 300-person strong demonstration outside Parliament next week…

    According to Mr Weir, a number of the group's members that have called Prudential's customer services helpline to voice their concern - only to be told that the incomes they rely on are on a downward trajectory heading toward zero…”

    Katie Morley, in the Sunday Telegraph 19th October, 2014
  • “Many of us entrust pension companies with our financial futures and a serious error on their part can result in not just inconvenience, but turmoil for a family's long-term prospects…When so much is at stake, there is no place for savers being misinformed about the size of their pension pot or income prospects to the tune of thousands of pounds.

    As a constituency MP, I have come across cases of people being given seriously misleading information about their pension position and making life-changing decisions on the basis of that information.

    When this happens they should get proper compensation, not just a token payment…

    While it is important that we have systems of redress and compensation schemes, they are no substitute for companies treating their consumers fairly in the first place…

    Amazingly, the average Briton has 11 different jobs in their lifetime. Even a financial expert would have trouble keeping track of 11 different pensions and understanding the retirement income they could expect from them, so what hope for the rest of us?

    It's my strong view that for decades we have allowed pensions to become far too complicated. The basic idea that you put money aside when you are working so that you can draw on it when you are not working is not a difficult one to grasp…

    We need a new culture in the pensions industry that puts the consumer first.

    And when things go wrong, the Mail is right to say that firms should be swift to resolve matters and offer proper compensation. Only in this way will we restore much-needed confidence in saving for retirement through a pension.”

    Steve Webb MP, Pensions Minister in the Daily Mail 1st October, 2014
  • "Equitable Life: £1bn redress has been paid. The Government says it has paid almost £1bn to 877,000 policyholders - but there are still another 160,000 savers who can't be traced.

    The Government has paid £973m compensation to policyholders with Equitable Life, the insurer which all but collapsed 15 years ago. HM Treasury said that by the end of June, 877,000 policyholders have received redress under the Equitable Life Payment Scheme. Around half of these are individual savers who had pensions or other policies with the firm. The rest had pensions policies into which they had paid through their work, or with-profits annuities - policies which paid an income but where money also remained invested.

    But HM Treasury said there were still 160,000 policyholders "who are due a payment but where the scheme has not yet been able to trace or validate their address".

    It said it was still trying to find these eligible savers and would "continue to consider all proportionate actions it can take to do this". Many are thought to be dead&helip;

    In October last year the scheme was extended from its original April 2014 deadline to a new deadline in mid-2015, to give eligible policyholders more time in which to come forward or be identified. HM Treasury said a further 17,000 people had been paid since April.
    Andrea Leadsom, economic secretary to the Treasury, said she was "pleased with the progress."

    Daily Telegraph, by Richard Dyson 23rd July, 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)

  • Equitable Life policyholders to receive uplift, but call is still on to ‘settle debts’

    Equitable Life's remaining 345,000 policyholders will get a 25% boost to their policies next month, while the 5% exit penalty for leaving the society is finally removed.

    The effective 30% uplift in value for anyone wanting to transfer out of the society, which came close to collapse in 2000, means exit may now be a more attractive option.

    In 2008, after an eight–year campaign by Equitable Members' Action Group (EMAG) in the courts and in parliament, the parliamentary ombudsman found the government guilty of maladministration, in a 2800–page report.

    In 2011, the government decided to award 100% compensation to those who took pensions after September 1, 1992, and nothing to those who retired earlier.

    EMAG commissioned an expert report from Scottish actuary David Forfar which found a ‘remarkable consistency of losses’ between both groups, with most seeing their pension income cut by 60% and going down every year. The action group's campaign to reverse the decision, fronted by actress Honor Blackman, prompted the government to announce a year ago that all those excluded would get a £5000 cheque, and payments have been going out this year.

    Paul Weir, spokesman for EMAG, which has boasted 50,000 members, commented:

    "EMAG's policy remains that the pre–1992s should be treated on exactly the same basis as post-92s, and awarded a properly–calculated amount based on the same formula. The £5000 is a down-payment."

    The Equitable Life Payment Scheme, paying out less than one-quarter of their losses to all other EL victims, has one year to run.

    Mr Weir said:

    "We are ramping up our campaign to persuade MPs that 22.4% of our acknowledged losses is not enough. We want them to settle the debt on the missing 77.4%. We were originally told the amount was capped for ‘affordbability’ reasons. If the economy is improving, that reason no longer holds."
    Read the article by Simon Bain in the Herald – 29th March 2014