What is the Equitable Life Payment Scheme?
The Equitable Life Payment Scheme was set up by the government following the collapse of life insurer Equitable Life. Poor regulation meant The Equitable Life Payment Scheme was set up by HM Government to make fair and transparent payments to Equitable Life policyholders who suffered financial losses as a result of government maladministration which occurred in the regulation of Equitable Life.
In October 2010, the Government announced that it would pay out £1.5bn to these policyholders via the Equitable Life Payment Scheme, which completed its first year of operation in June 2012.
By 2015 £1bn had been paid to 87% of eligible policyholders.
Closure of the scheme to new claims
The government has announced that the Equitable Life Payment Scheme will close to new claims on 31 December 2015. If you think you may be eligible for a payment and have not yet been contacted by the scheme, you should telephone the scheme on 0300 0200 150 to check your eligibility, providing your Equitable Life policy number when you call.
Q: Who is eligible?
A: (i) Policyholders who purchased a new with-profits policy after 1 September 1992 and before 31 December 2000; and
(ii) Policyholders who paid a premium on an existing with-profits recurrent single premium policy between 1 January 1993 and 31 December 2000.
To receive a payment, the policy must have made a relative loss.
Q: What is a relative loss?
A: Essentially, it is the difference between what policyholders receive from their Equitable Life policies and what they would have received if they had invested in certain comparator companies. If the value of the Equitable Life policy is less than it would have been at the comparator company, the policy would be deemed to have made a relative loss.
Q: What should I do if I am a member of a Group Company Pension scheme?
A: HM Government is working with Scheme Trustees and you should contact your Group Scheme. However, there are a number of schemes HM Government has been unable to locate. It has published a list of these on its website: http://equitablelifepaymentscheme.independent.gov.uk
If you are a member of one of these schemes, contact the Government Compensation Scheme on 0300 0200 150 to progress your payment.
Please note if you are currently receiving a with-profit pension from Equitable Life you will not be affected by the scheme closure on the 31st
December 2015. If you have suffered a relative loss, compensation will continue to be paid even after the Scheme has closed down.