£5,000 equitable payout next week

Updated: 

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More than 9,000 victims of the Equitable Life scandal are to receive a £5,000 compensation payment by early next week, the Government confirmed.

The single "ex-gratia" payment will be made to those who were shut out of the main compensation scheme because they bought their annuities before a cut-off point in 1992.

A further 450 policyholders who also receive pension credit will receive an extra £5,000.

The Government brought forward the timetable for compensation from April 2014 originally.

Financial Secretary to the Treasury Sajid Javid said: "In many cases the pre-1992 policyholders, the vast majority of who are very elderly, are facing financial hardship having received less than they expected from their Equitable Life policy.

"Having announced that we would make ex-gratia payments to this deserving group in the Budget, we have pulled out all the stops to make this happen.

"I am delighted that we are going to be able to make them next week, before Christmas."

Chancellor George Osborne announced in this year's Budget that the Government would make the ex-gratia payouts after campaigners including actress Honor Blackman carried out high-profile demonstrations over a previous decision to leave pre-1992 policyholders out of the compensation scheme.

The Government had previously set aside £1.5 billion to compensate existing and former policyholders at the society after the parliamentary ombudsman identified 10 instances of maladministration by regulators and Whitehall officials in relation to Equitable in the period leading up to December 2001.

It is estimated that policyholders at Equitable Life have lost £4.3 billion compared with if they had held their money with another institution.

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