The government today (Tuesday 10 September) announced that it now intends to make payments to pre-September 1992 Equitable Life With-Profits Annuity (WPA) policyholders this financial year (2013 to 2014) rather than the next financial year, as previously planned.
The Chancellor announced in Budget 2013 that the government will make special payments to a particular group of Equitable Life policyholders. A single ex gratia payment of £5,000 will be made to people who have one or more With-Profits Annuities from the Equitable Life Assurance Society dating from before September 1992 and were aged 60 or over at the date of the Budget announcement on 20 March 2013.
The government decided to make these payments as this particular group of policyholders is elderly and may be under financial pressure, as they have not received the income they had hoped for from the Equitable Life annuity they bought over 20 years ago.
These payments are therefore intended to help this group of policyholders who may be living with a reduced annuity income, and to relieve some of the associated pressures.
The government said that it would look to make these payments in the next financial year or earlier if possible, and has confirmed today that it will proceed with earlier payments this financial year as long as the necessary legislation can pass through Parliament in good time. These regulations will be laid in Parliament as soon as both Houses return from recess.
There are around 10,000-11,000 policyholders eligible for a payment.
Letters to all individuals eligible for a payment will be sent out this week.
The government also confirmed today that an additional £5,000 will be paid to those policyholders who meet the above criteria and are in receipt of Pension Credit when the payments are made.
Policy holders are encouraged to check their entitlement to pension credit with the Department for Work and Pensions.
Economic Secretary to the Treasury Sajid Javid said:
This government is helping to compensate the policy holders of Equitable Life who suffered an injustice.
As the Chancellor said in this year’s Budget, we will make ex gratia payments of £5,000 to those elderly policyholders who have With-Profits Annuities dating from before September 1992 in the next financial year or earlier if possible.
I’m delighted to say today that we now intend to make these payments in the current financial year.