Equitable Life policyholders still waiting on payouts
Policyholders who held insurance policies with troubled Equitable Life are still waiting for payouts from the government, over 12 years after the insurance firm first started to show signs of failing.
It’s estimated that around 500,000 people are still waiting on insurance payouts from the insurance company, 12 years on, and the situation is fast becoming one of the most notorious in the history of British finance.
The majority of the 500,000 who are worst affected were members of group workplace pension schemes, which were run by Equitable Life and ran into trouble in the 1990s.
The government will point to the 90% of Equitable Life customers who have now received some of the money they are owed, but reports suggest a huge number of elderly customers still haven’t received any money, and may not live long enough to see that money.
With low charges for pensions and life insurance policies, the company quickly grew a huge portfolio of life insurance and pension customers, and coupled with its reputation as the oldest life insurance provider in the world, built a strong customer base, particularly middle and upper class citizens.
Problems began to appear in 1999, when pension promises the company simply couldn’t afford to pay for became evident, and suddenly the company had to shut its doors to new customers, and cut the amount it was paying out to old customers.
Some 10 years later the new coalition government of the Conservatories and Lib Dems promised to pay £1.5billion worth of compensation to the million customers worst affected, after admitting that the regulations the government had in place were not good enough to prevent such a disaster.
Of that £1.5billion pledge, only £277million had been paid out by the end of last month, with only 288,000 getting the money they were owed. A further 500,000 had received letters telling them a payment was on its way, during which time many customers are struggling to make ends meet in retirement.
The company added that 10% of policyholders no longer had contact details registered with the company, so if you are expecting a letter but have moved home then contact the company with your new details.
Equitable Life Payments scheme revealed that only 0.25% of claimants had made a complaint about the scheme, and that most cashed their cheques within two weeks.