The details of how the Government scheme to make payments to Equitable Life policyholders will work were published by Mark Hoban MP, Financial Secretary to the Treasury, today.
The Equitable Life Payment Scheme design document sets out:
- the Scheme rules;
- the Scheme administration and timetable;
- the methodology behind loss and payment calculations;
- the Scheme’s approach to making payments;
- the details of the queries and complaints procedure; and
- the plans for communicating with policyholders.
In line with the Financial Secretary’s ambition to start making payments by the middle of this year, the Scheme is on track to make the first payments before the end of June.
Mark Hoban, Financial Secretary, said:
Today, I am setting out the design of the Equitable Life Payment Scheme for Parliament, policyholders and all other interested parties to see. This is a complex issue, but the Scheme has been designed to reflect the principles of fairness, transparency and simplicity.
When payments start in the middle of this year it will be a huge milestone for the policyholders who have waited so many years for the resolution of this matter.
Policyholders do not need to do anything at this stage - the Scheme will contact them in the first instance to provide further information.
Notes for Editors
The Equitable Life Payment Scheme design document can be found on Equitable Life website (external website, opens in a new window).
The Scheme design reflects the actuarial analysis carried out by professional services company, Towers Watson, the evidence and arguments received in response to the Government’s call for representations following the publication of Sir John Chadwick’s advice, and the recommendations of the Independent Commission on Equitable Life Payments.
The Scheme also reflects previous announcements that With-Profits Annuity policyholders will have their losses covered in full, and that Scheme payments will be free of tax and will not affect eligibility for tax credits.
The Spending Review on 20 October 2010 announced that in the region of £1.5 billion would be available for the Payment Scheme, £1 billion of which would be paid out upfront over the first three years of the Spending Review period.
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