When David Cameron of Equitable Life raised the hopes of over one million policy holders when he promised to “sort out” the company in opposition and then to pay only limited payments that were agreed upon by the last government, he raised their hopes in a cynical way that is now coming back to haunt him.
To date, the exact amount of compensation has not yet been specified. On Tuesday, the Treasury announced that 945,000 policyholders that held profits would receive a mere 22.4 percent of their losses. The figures that have been announced to date were similar to those that a a retired judge set when the Labour government led a review that greatly criticized Conservatives; who are using the scandal as an election platform like the Liberal Democrats.
Cameron has been accused of making his pre-election pledge in order to win votes of policyholders even though he knew that it would be highly unlikely for the needed cash to be rounded up in order to carry out his promise. Paul Weir of the Equitable Life Action Group believes this is exactly what Cameron did, and said it was a “…slap in the face for Equitable Life Policyholders.” He believes that even as the politicians were seemingly backing Equitable Life, signing pledges, etcetera, that they didn’t just ‘happen to find out’ that the money wasn’t there to begin with.
The government announced that about 37,000 people with Equitable Life annuity products would be compensated for any losses in full which included regular payments for the duration of their lives.
Mark Hoban, who is the Treasury Minister, said that elderly members would be the first to receive compensation awards, along with estates of victims who have died before they could receive compensation.
The catch is for young people though; they may possibly have to wait until 2014, expecting a total of £775 million to be paid to annuity policy holders, and this includes no interest.