I appreciate your disappointment with the level of payments that have been made to Equitable Life policyholders, and I share your dissatisfaction at how the previous Labour Government handled the collapse of Equitable Life in 2000.
However, I believe that the UK Government is right to seek to strike a balance between the interests of policyholders and taxpayers, since neither group was responsible for Equitable Life’s collapse.
As the Parliamentary Ombudsman stated in 2008 report, the total amount paid out in compensation should also reflect the interests of the taxpayers. Therefore, while the total relative losses suffered are in the region of £4.1 billion, the UK Government has made £1.5 billion available for the payments scheme.
In terms of distributing these funds, the UK Government’s decision to apply a 22.4% pro rata to payments to non With-Profits Annuitants follows the recommendation of the Independent Commission on Equitable Life Payments, which was established to consider a number of options and take into account the views of a range of interested parties.