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First payments confirmed for Equitable Life policyholders

Under strict embargo until 00.01 Thursday 30 June - First payments confirmed for Equitable Life policyholders

News Release issued by the COI News Distribution Service on 29 June 2011

The Financial Secretary to the Treasury, Mark Hoban MP, today confirmed that the first cheques will be sent to Equitable Life policyholders on Thursday 30 June 2011, meeting the Government’s commitment that payments will start by the end of June.

Hundreds of policyholders will receive cheques in the coming weeks at the start of a three year payment programme, and the Government has set aside half a billion pounds for the Equitable Life Payment Scheme over the coming year.

Policyholders do not need to get in contact at this time – the Government will be writing to all the eligible policyholders it can by June 2012 to provide information about their personal status within the Scheme. In accordance with the Independent Commission on Equitable Life Payments’ recommendations, the Scheme will prioritise the oldest policyholders for earlier payment, along with payments to estates of deceased policyholders.

Because of the years of frustration and waiting that policyholders have endured, the Government has moved swiftly to make sure that the Scheme is in place as quickly as possible. The Government set aside £1.5 billion in the 2010 Spending Review for the Scheme, representing a fair deal for both policyholders and taxpayers.

Mark Hoban said:

“After a decade of delay and indecision, I am delighted that today we’re beginning to send out cheques to eligible Equitable Life policyholders. We will pay out £1.5 billion to ensure that policyholders receive the justice they deserve.”

Notes for Editors

1.Policyholders do not need to do anything at this stage. Following Thursday’s first payments, the Government will write to all the eligible policyholders it can during the next twelve months.

2.In May 2010, the Government pledged to implement the Parliamentary and Health Ombudsman’s recommendation to make fair and transparent payments to Equitable Life policyholders through an independent payment scheme.

3.In May this year, and following the Ombudsman’s recommendations, the Treasury published further details (here) about how the Government intends to fulfil this pledge and make payments to policyholders. This comprehensive blueprint sets out detailed information about:

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.

4.The Scheme will pay out lump sum payments to the majority of policyholders over three years. As previously announced, With-Profits Annuity policyholders will have their losses covered in full in the form of regular annual payments over the course of their lifetime. Scheme payments will also be free of tax and will not affect eligibility for tax credits.

5.Further information has also been placed on the Equitable Life Payment Scheme website, which can be found: here.
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