Enhanced compensation for Equitable Life policyholders
Over 1 million Equitable Life policyholders could finally get the compensation they deserve, 10 years after they lost their money.
The coalition agreement released by the newly formed government last week says it will implement the Parliamentary Ombudsman's recommendation to make "fair and transparent payments" to those who lost savings when the pension company nearly collapsed in 2000.
Payments will be made "through an independent payment scheme, for their relative loss as a consequence of regulatory failure".
In 2008 the Parliamentary Ombudsman Ann Abraham said "a decade of regulatory failure" had been one of the main reasons for Equitable Life’s troubles.
She called on the government to set up a scheme to compensate savers for their losses. However, the government at the time largely dismissed Abraham’s report and proposed a less generous scheme than she suggested.
More than one million policyholders should now receive enhanced compensation under the Conservatives and Lib Dems plans.
Independent policy adviser Dr Ros Altmann calls the announcement "good news" and urged the government to pay compensation quickly.
Altmann says the new secretary of state for work and pensions, Iain Duncan Smith, takes charge at a crucial time for pensions policy, and although all the announcements such as increasing the state pension, reviewing the affordability of public sector pensions and ending compulsory annuities are to be welcomed, "the devil is in the detail".
"Pensions hardly featured in the election campaign, but the demographics demand action," she argued.
If you’ve have a complaint about a financial service product you have bought but the company you bought it from refuses to resolve your problem after eight weeks, the Ombudsman can help. The Ombudsman will investigate and resolve the matter. The Ombudsman is independent and its service is free to consumers. The Ombudsman may find in the company’s favour but consumers don’t have accept its decision and are always free to go to court instead. But if they do accept an Ombudsman’s decision, it is binding both on them and on the business.