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Daily Telegraph Opinion article by Paul Weir of EMAG
‘We will haunt MPs until they put this grave injustice right’
Equitable Life campaigner vows to continue the fight for more compensation.
By Paul Weir of the Equitable Members’ Action Group 28 Mar 2011
Although Equitable Life’s announcement is a bit of good news for some departing policyholders, it will not benefit the vast majority who are looking at losses of 85pc – despite the compensation due to be paid by the Government.
Despite collective losses in excess of £6 billion, the Government is proposing to pay 945,000 victims of the Equitable Life scandal just 15% of the amount they have actually lost due to a decade of government maladministration.
This means that somebody who has lost £50,000 from their pension pot, may receive just £7,500 in compensation at some point between now and 2014. It is unclear whether any further interest will be paid to compensate for the delay.
The Government has already admitted that victims’ losses exceed £4 billion, when EMAG reckons they are more like £6.3bn when maladministration in 1991 and exit penalties are taken into account.
The £775m allocated for non-WPAs means that victims can expect to get just 15% of their losses - the equivalent of an 85% public purse reduction, at a time when the average cut in government expenditure is 19%. This seems highly discriminatory.
EMAG will be renewing its campaign to press for full compensation by the end of this Parliament and urgent compensation this year for those WP Annuitants who have been shamefully excluded from receiving anything.
We know from our bulging postbag that our members are furious at what they see as a broken pledge from the coalition. We are re-structuring EMAG to assist local groups who will be visiting their MPs to express their anger and to ensure that they do not think the ‘Equitable problem’ is dealt with.
Our members will be relentless in pressing for the compensation they deserve. The government has made a big mistake and we will haunt MPs until they put this grave injustice right.
We are also demanding that the government urgently reconsider their decision to exclude an estimated 10,000 WP Annuitants who had the misfortune to take their pension between 1987 and 1992. By definition these people are likely to be even older and more frail than the post 1992 WPAs that the government said were the most deserving of 100% compensation.
The Government claims that they have made excessive gains and should not be compensated at all. But EMAG has obtained the pension incomes figures for a number of WPAs, for policies started both before and after the cut off date of 1 September 1992. The data shows a remarkable consistency between the losses of both groups. Typically their annual pensions continued paying out roughly the same amount until 2003 when they started to plummet. By 2011 most WPAs have seen their pension income slashed by around 60%. And it is still going down, every year.
Since compensation for other WPAs is designed to offset any gains against losses, we would argue that if what the Treasury claims is true (about gains) then there would be no cost incurred by including the pre-1992 WPAs in the same scheme and on the same basis. If they really have lost nothing, then no compensation would be due.
However, if as EMAG claims, they did lose, then the government would have to find more money to put matters right.
Time is short – the average age of these WPAs is 85 – many may not live to see any compensation unless the Government acts this year. We estimate the cost at about £150 million, or £50 million a year for the next three years. This contrasts with the £620 million promised to the 37,000 people who started their WPAs after 1992.
A caring, compassionate government would ignore the technicalities, and make ex-gratia payments available to the pre-1992 WPAs NOW on the same basis of calculation as that applied to those whose policies started after 1992. We call on the government to honour the spirit of its election pledge to Equitable Life victims and to right this disgraceful wrong NOW.
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