Question
I had my personal pension plan with Equitable Life and as soon as I was able chose to take an annuity approx 3 years ago with AXA.
Whilst I was with Equitable I lost at least 25%+ from my plan - will I be eligible for any compensation?Answer
In theory, yes, you should be due some compensation. But despite the Government announcing it will set aside £1.5 billion to pay compensation to Equitable Life policyholders affected by the company’s financial implosion, detail is still thin on the ground.
What seems to be clear is that £620 million of the money will be used to compensate those with guaranteed annuities in full, leaving £880 million for everyone else. So given your loss stems from a pension invested in the with-profits fund rather than a guaranteed annuity it looks like your compensation will only cover a proportion of your loss – I’d guess less than half. On the bright side it appears the payment will be tax-free – you’d expect them to be, but there were fears the Government would do otherwise.
Compensation levels are expected to be announced early next year with payments commencing in the summer. The process should be automatic, so expect to receive information in the post once the Government has finalised the details and make sure Equitable Life has up to date contact details for you.
I had my personal pension plan with Equitable Life and as soon as I was able chose to take an annuity approx 3 years ago with AXA.
Whilst I was with Equitable I lost at least 25%+ from my plan - will I be eligible for any compensation?Answer
In theory, yes, you should be due some compensation. But despite the Government announcing it will set aside £1.5 billion to pay compensation to Equitable Life policyholders affected by the company’s financial implosion, detail is still thin on the ground.
What seems to be clear is that £620 million of the money will be used to compensate those with guaranteed annuities in full, leaving £880 million for everyone else. So given your loss stems from a pension invested in the with-profits fund rather than a guaranteed annuity it looks like your compensation will only cover a proportion of your loss – I’d guess less than half. On the bright side it appears the payment will be tax-free – you’d expect them to be, but there were fears the Government would do otherwise.
Compensation levels are expected to be announced early next year with payments commencing in the summer. The process should be automatic, so expect to receive information in the post once the Government has finalised the details and make sure Equitable Life has up to date contact details for you.
Read this Q and A at http://www.candidmoney.com/questions/question305.aspx
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