The seventeenth report from the Public Affairs Committee, dated 26th July 2013, stated that when setting up the Equitable Life Payment Scheme, HM Treasury failed to learn the lessons from previous government compensation schemes.
It focused on an arbitrary deadline for making the first payments to policyholders rather than on detailed operational planning and clearly defined responsibilities.
This weak set-up led to a series of administrative failures including delays in making payments to policyholders and poor customer service. There is yet another arbitrary deadline of March 2014 for closure of the Scheme, increasing the risk that some policyholders, who remain untraced, will miss out on receiving the money they are owed.
The Treasury set up the redress scheme aimed at compensating those who lost money on their pension investments. However the MPs on the PAC now say that the lack of publicity over the cut-off time for claims has left a “real risk” that some might miss out. The committee called on the Treasury to publicise the deadline now, rather than waiting until September, which it is planning to do.
A National Audit Office (NAO) report has also said that not enough preparation work was done by the Treasury and NS&I – a view echoed by the Public Accounts Committee.
The NAO also said that while only 35% of total payments had been made, 72% of the ÂŁ57m administration budget had been spent. By the end of March this year, some ÂŁ577m had been paid out to 407,000 policyholders. The NAO and the PAC have both said that the government had failed to take on board the lessons of other compensation schemes when the system of redress was set up.
The overall message appears to be, if you believe you are an entitled Equitable Life saver, and have not been compensated, don’t delay – check out where you stand!
