Updated: Link to the latest (November 2015) progress report added.
The Equitable Life Payment Scheme was set up by HM Government to make fair and transparent payments to Equitable Life policyholders who suffered financial losses as a result of government maladministration which occurred in the regulation of Equitable Life.
Closure of the scheme to new claims
The scheme, which began making payments in 2011, has paid out over £1 billion to around 87% of eligible policyholders. With final tracing attempts now concluding, the government has therefore announced that the Equitable Life Payment Scheme will close to new claims on 31 December 2015. If you think you may be eligible for a payment and have not yet been contacted by the scheme, you should telephone the scheme on 0300 0200 150 to check your eligibility, providing your Equitable Life policy number when you call.
The Chancellor announced in Summer Budget 2015 that as part of the closure of the scheme, additional payments would be made to policyholders in receipt of Pension Credit who received a lump sum payment under the scheme. The amount of the additional payment will be equivalent to the 22.4% of relative loss payment already received.
Further information on the administration arrangements for the scheme’s closure.
For more details on what the scheme has achieved so far, read the November 2015 Progress Report.
For documents relating to the Equitable Life Payment Scheme, including past progress reports and information on the design of the scheme, consult the document collection.
Further payments to policyholders on Pension Credit
In the Summer Budget 2015 the Chancellor announced that a further payment would be made by the scheme to non-WPA policyholders in receipt of Pension Credit (With-Profits Annuitants are not eligible as they received 100% of their relative losses). Below are some points that may be helpful in understanding whether you may be eligible for a further payment.
Extra payment and eligibility explained
An extra payment is being made in early 2016 to non-WPA policyholders who have already received 22.4% of their relative losses from the scheme and are in receiving of Pension Credit. This payment will be an additional 22.4% of an individual’s relative loss, meaning that eligible policyholders on Pension Credit will receive a total of 44.8% of their relative losses from the scheme.
Policyholders due a payment of 22.4% who have not been contacted but apply to the scheme before 31 December 2015, provided they are receiving Pension Credit will also receive an additional payment.
How to receive the extra payment
Policyholders don’t need to do anything. The scheme will verify all non-WPA policyholder information with the DWP in early 2016 . The scheme will use the contact details it holds for these policyholders to issue the warrants for the payments. If you have changed your address since your last payment from the scheme, please inform us in writing as soon as possible so we can ensure you are paid swiftly.
Pension Credit eligibility
The scheme is unable to verify whether a policyholder eligible to claim Pension Credit, the best way to find out is by calling the Pension Credit claim line on 0800 99 1234. Information that needs to be provided includes National Insurance number, information about income, savings and investments, and bank account details.
Eligibility for extra payment
Only policyholders who have received 22.4% of their relative losses and who are also in receipt of Pension Credit (either Guarantee credit, Savings credit or both) will be eligible for an extra payment.
No further payments will be made to other policyholders. This means there is no change to the payments made to With-Profits Annuitants (WPAs), non-annuitants who do not receive Pension Credit and Pre-September 1992 With-Profit Annuitants.
If a policyholder has received a payment of 22.4% of their loss from the scheme but are not on Pension Credit, they may wish to call the Pension Credit claim line on 0800 99 1234, to check their eligibility as soon as possible.
Administration of payments
The additional payments will be issued by the scheme same way as the first payment, by the scheme sending a warrant (like a cheque) in the post in early 2016. If your address has changed since your last payment from the scheme, please inform us in writing as soon as possible.
Contact the scheme
The scheme will close to all new claims on 31 December 2015. Policyholders who believe they are eligible and have not received a payment should telephone the scheme by this date make their claim.
Policyholders who may wish to raise a query or complaint must contact the scheme in writing by 29 February 2016.
The scheme cannot respond to claims or queries received outside these dates.
Checking eligibility and claiming a payment
By phone
UK policyholders: 0300 0200 150
Overseas policyholders: +44 (0)141 232 1377
Call centre opening hours:
Monday and Tuesday: 9.00 to 17.30
Wednesday to Friday: 9.00 to 15.00
If you have an eligible policy but have not yet been contacted by the scheme, you should telephone the scheme to check your eligibility.
You will be asked to provide your policy number. Your policy number will be on all correspondence from Equitable Life. For group (company pension) scheme policies, the policy number is made up of 2 elements, a 5 digit scheme number and a 9 digit member number. The 9 digit member number is often, but not always, your National Insurance number.
The scheme will endeavour to process your claim over the phone. To enable the scheme to do this, you should have all your relevant policy documentation to hand.
By post
Please write to the scheme at:
Equitable Life Payment Scheme
PO Box 4110
Glasgow
G58 1EL
Please quote your full name, address and your Equitable Life policy number in all correspondence.
Verifying your identity with the scheme
Where the scheme’s records of address and identity are incomplete, the scheme may ask you to provide proof of address and identity by post. Policyholders who are requested to provide information or documentation by the scheme should send this information within 2 weeks of the request. Representatives of deceased policyholders, because of the administrative arrangements they face, should respond within 1 calendar month of the date of a request from the scheme. This is so that the scheme is able to process and issue payments efficiently as it closes down.
Policyholders experiencing difficulty in providing the information or documentation requested in should contact the scheme to ensure their payment can be processed before the scheme closes.
The scheme may also ask for certified copies of original documents in a number of other circumstances, for example in the event of:
a change of name or address
the death of one or more named individual on a policy
implementation of a Power of Attorney
a recalculation
Documents that can be used as proof of address and identity
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Complaints about the scheme
Policyholders who may wish to raise a query or complaint must contact the scheme by:
29 February 2016
Or
1 calendar month of the date shown on the payment notification letter sent to the policyholder or their representative by the scheme
The scheme cannot respond to complaints received outside these dates.
If you have a complaint about the way the scheme’s rules have been applied, or how the scheme has handled your case, you should write to the scheme’s complaints department with details of your complaint at this address:
Complaints department
Equitable Life Payment Scheme
PO Box 4110
Glasgow
G58 1EL
The scheme will acknowledge the complaint within 5 working days and aim to resolve the complaint within 8 weeks. A full investigation of the problem you have raised will be carried out and the scheme will write to you to let you know the outcome.
If you are unhappy with the outcome and the scheme can assist you no further in resolving the complaint, you may request the Independent Review Panel to consider your case. The Independent Review Panel provides a final review process to people who have not been able to resolve their complaint through the scheme’s complaints process.
You will receive an Independent Review Panel referral number and a form to complete to send to the Review Panel. The Review Panel will then correspond with you directly. Policyholders have 1 calendar month from the date of the issue of the referral number to request a review from the Independent Review Panel.
Please note that the Independent Review Panel cannot consider your case until you have completed the Equitable Life Payment Scheme complaints process. All contact with the panel must be in writing.
Information for With-Profits Annuitants (WPAs)
The annual payments already being made to With-Profit Annuitants will continue for the duration of the annuity and are not affected by the scheme’s closure to new claims. The closure period concerns the scheme ceasing to process new claims, and the related queries, complaints and appeals.
Letters to policyholders from the Department for Work and Pensions (DWP)
The scheme is working with the Department for Work and Pensions (DWP) to try to contact the policyholders who remain unpaid.
The scheme provides DWP with:
policyholder’s name
National Insurance number
date of birth.
This enables DWP to identify the individual and forward the scheme’s letter to the policyholder at the address held in DWP’s records.
If you receive a letter from the scheme which has been forwarded to you by DWP please follow the instructions in the letter carefully.
You will need to call the scheme’s policy checker service on 0300 0200 150 with details of your Equitable Life policy numbers. Please ensure you have your policy number to hand before you call. If you contact the scheme without your policy number we will be unable to process your payment.
Your policy number(s) is shown on the correspondence you have received from Equitable Life. If your policy was purchased through a group (company pension) scheme your policy number has two parts: a five digit scheme number and your scheme member number. The scheme member number is often, but not always, your National Insurance number. View a list of the five digit scheme numbers.
If you cannot find or are unsure of your policy number(s), you can obtain them by writing to:
Equitable Life at Equitable Life Assurance Society,
Walton Street,
Aylesbury,
Buckinghamshire,
HP21 7QW.
Eligible policies
You are eligible for the Equitable Life Payment Scheme if you hold, or have held, one or more of these policies:
Equitable Life Conventional With-Profits (CWP) policy bought between 1 September 1992 and 31 December 2000 inclusive
Equitable Life Accumulating With-Profits (AWP) policy (both individual and group scheme policies) that either started between 1 September 1992 and 31 December 2000 inclusive, or had at least 1 premium paid into it between 1 January 1993 and 31 December 2000 inclusive
Equitable Life WPA (With-Profits annuity) policy bought between 1 September 1992 and 31 December 2000 inclusive
If you are unsure whether a policy you hold, or have held, is eligible for the scheme, or which type of policy it is, please refer to the product table or The Equitable Life Payment Scheme design.
Payments made by the scheme
How the scheme calculates payments
The scheme calculates a payment amount for every eligible policy based on any relative loss which that policy has made.
Relative loss
The concept of relative loss was introduced in the Parliamentary Ombudsman’s 2008 report on the Equitable Life Payment Scheme. It is the difference between the value of an actual Equitable Life policy and the value of a notional policy which the policyholder might have held had the investment been made in a similar product in a comparator company.
This concept is based on the understanding that those choosing to invest in Equitable Life who had relied on the regulatory returns that were subject to government maladministration, had lost the opportunity to make a fully informed decision. It follows that, had they had this opportunity, they might have invested elsewhere. Government maladministration was identified as having affected policyholders’ investment decisions between September 1992 and December 2000. This means that a policyholder’s relative loss only applies to returns received from investment decisions from this period.
The scheme first looks at a range of alternative With-Profits companies that offered the appropriate mix of With-Profits business over the period in question, in order to calculate a comparable fund value. This value is then compared with your own fund value to calculate your relative loss.
If the value of the Equitable Life policy is less than it would have been with a comparable company, the policy would be deemed to have made a relative loss.
If the value of the Equitable Life policy is greater than it would have been with a comparable company, the policy would be deemed to have made a relative gain.
Policies may have made a relative loss or a relative gain depending on how they performed compared to similar products with comparable companies. Only those policies that have made a relative loss will receive a payment.
For holders of AWP or CWP policies (both individual and group scheme policies)
If your policy ended before 31 December 2009, then the scheme takes the relative loss value accrued in the eligible period and applies a fixed 4% per year interest up until 31 December 2009, to work out your total relative loss.
You will receive a pro rata amount of this total relative loss. The pro-rata has been set at 22.4% following the advice of the Independent Commission on Equitable Life Payments. This is to be fair to taxpayers as well as policyholders.
If 22.4% of your total relative loss is less than £10 then no payment will be made. This is to avoid disproportionate administration costs.
If you have more than one AWP or CWP policy then relative losses will be offset against relative gains on all of these policies. This means that any relative loss would be reduced if you have other policies that have made a gain.
The scheme has prepared an illustrative guide on how payments to AWP policyholders are calculated.
A simplified overview of the payment calculation for AWP policies and accompanying examples are available to help policyholders who may be seeking a better understanding of how the Scheme has calculated their payments.
For holders of With-Profits Annuities
Relative losses on With-Profits Annuities (WPAs) will be covered in full; they are not subject to any pro rata of 22.4%. This is because holders of these policies were found to be more vulnerable to their losses than other policyholders, as they were unable to withdraw from this type of policies.
Your relative loss is calculated by comparing the annuity payments you would have received or are expected to receive from a comparable policy, with the payments you actually received or would be expected to receive from the Equitable Life policy.
The relative loss may include past losses and future losses.
past losses are the difference between the actual payout received between 1 January 1993 and 31 December 2009, and the annuity payments that a sample of similar with-profits companies would have paid on similar products. The comparable products were chosen from alternative companies offering WPA policies (during the period in question) in which you might have invested had you not chosen Equitable Life
To calculate future losses, it is necessary to make assumptions about future bonus rates beyond 31 December 2009, so the actual and comparable payouts are estimated annuity payments that are assumed to be paid after 31 December 2009
The scheme has prepared a number of illustrations of relative loss for WPAs. The graphs available are intended as indicative illustrations of the relative loss calculation.
For more detailed information about how the scheme calculates payments in relation to the relative loss, please refer to The Equitable Life Payment Scheme design.
How payments are issued
For holders of AWP or CWP policies (both individual and group scheme policies)
You will receive any payment due in a lump sum via warrant. A warrant works like a cheque. On receiving a warrant by post, you should pay it into your bank within 3 months, as you would a cheque.
If you are due payments on multiple AWP or CWP policies, you will receive all your payments in a single lump sum where possible. However, payments made on a group scheme policy will be made separately from those on individual AWP or CWP policies.
For holders of With-Profits Annuities
As a With-Profits Annuity (WPA) policyholder, you will receive your entitlement for past losses in 5 equal annual payments, and for future losses through regular annual payments, one year in arrears, for the duration of your annuity. Payments will be made annually for policies that have at least one surviving annuitant. Initial payments will be made by warrant, provided the policyholder can be identified and traced. Thereafter, payments are scheduled to be made annually by bank transfer in May each year.
Making regular payments mirrors the income you would have received from your Equitable Life policy. Paying WPA past losses more quickly would ‘eat into’ the funds available for other policyholders. It also enables the government to continue funding payments beyond the current Spending Review period.
Payments to a third party (not the policyholder)
In some cases the holder of the policy will not be the payee (ie the person that receives scheme payments). This is because, in these cases, the person who took out the policy or paid premiums in connection with it is not the person who has suffered a relative loss. More information about such cases is available in The Equitable Life Payment Scheme design, or by writing to the scheme.
Queries about your payment
Policyholders who may wish to raise a query must contact the scheme by:
29 February 2016
Or
1 calendar month of the date shown on the payment notification letter sent to the policyholder or their representative by the scheme
The scheme cannot respond to queries received outside these dates.
The scheme will be able to address some general queries and complaints over the telephone, but may ask you to submit more complex ones in writing.
If any of the information on a payment statement such as name, address or policy number is wrong, then please inform the scheme as soon as possible.
The scheme cannot alter the method used to calculate your payment. The scheme can only recalculate your payment where the original Equitable Life records were inaccurate. To check that the scheme holds all the correct information for your policy, you should write to the scheme to ask for your Core Data Report. You can then compare this against your own policy records, and provide evidence to the scheme of any inconsistencies you may identify.
Tax and benefit treatment of payments from the scheme
Payments that the scheme authorises are not subject to UK Income Tax, Capital Gains Tax, or (in the case of companies) Corporation Tax. This means you do not need to declare them to HM Revenue & Customs. Furthermore, payments made directly to estates of deceased eligible policyholders are not subject to Inheritance Tax.
Payments to non-UK policyholders
For all policyholders holders of AWP or CWP policies (both individual and group scheme policies)
If you live outside the UK but bought your policy in £ Sterling, you will receive a £ Sterling warrant if you are due a payment.
If you bought your policy in a foreign currency, ie, pre-Euro currencies, Euros or US Dollars, then your relative loss has been calculated in the currency in which it was bought and then converted into pounds sterling using the exchange rates applicable at 31 December 2009. This is the amount the scheme will pay you in the form of a £ sterling warrant if you are due a payment from the scheme.
For holders of With-Profits Annuities
You will receive your annual payments by £ sterling warrant, rather than electronically.
Payments to estate of deceased policyholders
Executor of a deceased policyholder
If you are an executor or administrator of an eligible estate and you have not heard anything from the scheme, you should contact the scheme as soon as possible on 0300 0200 150 to confirm the eligibility of the policy in question. You will then be advised of the next steps to take.
Representatives or executors requested to provide information or documentation by the scheme must send this information within 1 calendar month of the date of the request. This is so that the scheme is able to process and issue payments efficiently as it closes down.
Policyholders experiencing difficulty in providing the information or documentation requested in should contact the scheme to ensure their payment can be processed before the scheme closes.
Payments to estates of deceased policyholders
The scheme will close to all new claims on 31 December 2015. Representatives and executors of policyholders’ estates which are believed to be eligible who have not been contacted should telephone the scheme by this date make their claim.
Representatives who may wish to raise a query or complaint must contact the scheme in writing by 29 February 2016.
The scheme cannot respond to claims or queries received outside these dates.
Where the payee on a policy has died, his or her estate becomes the payee. In practice this means making payment to the executor or administrator of the estate. However there are further rules surrounding payments issued in relation to deceased With-Profits Annuitants.
for single life annuities, if the policyholder dies during the 5 year period in which payments for past loss are being made, the estate of the policyholder will then receive the remainder of any unpaid past loss and any remaining unpaid future loss, to date of death (or fixed guarantee term), as a lump sum
for joint life annuities, if the first annuitant on the policy dies, the estate of the first annuitant will receive the remainder of any unpaid past loss and any remaining unpaid accrued future loss as a lump sum. If there is a surviving second annuitant for whom future losses then start to accrue, the payment of these losses will begin to be paid to the second annuitant one year in arrears. On the death of the second annuitant, any remaining unpaid future losses will be paid to the estate of that annuitant
Group (company pension) scheme policies
Contacting group scheme members
Once the scheme has received contact details for those members who are due a payment from the group’s trustees, the scheme will send them a letter with a statement explaining the value of the payment and the approximate date it will be sent.
Where no relative loss has been made, or where relative loss is less than £10, the scheme will not contact individual members. Instead the scheme will inform the Group scheme trustee and leave it to the trustee’s discretion as to whether to inform their members that they will not receive a payment. In addition, the scheme will not contact members of Group schemes who are ineligible for the Equitable Life Payment Scheme.
Who the scheme pays in relation to group scheme policies
The scheme has the following criteria for identifying the appropriate payee for group policies:
for Defined Benefit schemes, the Trustees of the group scheme are the payees
for Defined Contribution schemes, the individual members of those group schemes are the payees, except where Equitable Life has no records of the individual members within the group scheme. In this situation, the Trustees of the group scheme will be the payees. The Trustee will act as a paying agent to the individual members of the group scheme and they must hold the authorised payment separately from the actual pension fund
Furthermore, where a person who would have been due a payment is deceased, the scheme will be making payments to that person’s estate.
A-Z list of group schemes
An A-Z list of group (company pension) schemes is provided so that you can find out which group schemes are covered by the scheme.
Questions about your group scheme policy
For questions that relate specifically to your group scheme policy, or to register a change of name or address, please contact your group trustee or administrator. If you are unable to contact your trustee, please contact the scheme directly for more information.
If you are a member of a defined contribution scheme and due a payment, your scheme’s Trustee will confirm your details to us and we will contact you directly.
If you are a group scheme trustee
If you are a trustee of an eligible group scheme and have not heard from the scheme, please write to the scheme or telephone 0300 0200 150 as soon as possible.
Background to the scheme
How the scheme traces eligible policyholders
The scheme has gathered data for eligible policyholders from Equitable Life (and the Prudential Assurance Society, for WPAs transferred to them). Due to the age of the data the scheme has adopted a rigorous process for verifying the addresses of policyholders to ensure payments are made to the correct people at the correct address. This involves checking against records such as the electoral roll, the phone book and credit histories. If someone cannot be verified against these various registers then the scheme may contact them and ask for further proof of identity before making payment.
Tracing group (company pension) scheme policyholders
When the scheme launched in 2011, there were additional complexities in retrieving the contact details of those policyholders who bought their policy through a group (company pension) scheme, because Equitable Life did not hold contact details for many of these policyholders. To address this issue, over the past months the Scheme has been writing to Trustees and working with large administration companies in order to obtain the most up-to-date contact details for members who are due a payment. The Scheme has now written to all 5,700 eligible group schemes and has data sharing agreements covering around 95% of group scheme members.
Tracing estates of deceased policyholders
The scheme is tracing and contacting the executors and administrators of the estates of eligible policyholders who died before the scheme began making payments in June 2011. In the majority of cases it is expected that this contact will enable the Scheme to make payment to the executor or administrator, but there may be some cases where this is not possible. These will be resolved on a case-by-case basis.
Operating the scheme
National Savings and Investments (NS&I) was chosen by HM Treasury to process payments and services for the Equitable Life Payment Scheme. This decision was taken because NS&I, through its outsourced partner Atos, provides similar banking services to its customers, and so can provide a cost effective service to the taxpayer.
NS&I cannot give advice or information on individual cases for the scheme. It has no influence on the amount paid. The records for Equitable Life policyholders are secure and kept separately from those of NS&I customers.
Pre-1992 With-Profits Annuities (WPAs)
The Equitable Life Payment Scheme only covers policies issued after 1 September 1992. In December 2013 HM Treasury issued payments to all pre-September 1992 annuitants who were eligible under the separate scheme announced in the 2013 Budget Statement.
Further guidance on Equitable Life payments.
View documents relating to the Equitable Life Payment Scheme.