The current CEO of Equitable Life has told those caught up in Equitable Life's collapse that they should accept a smaller pay out by the UK Government. Now, I have to say that the way that the figures are banded around you begin to wonder if there will ever be any real justice. Anyhow, the Parliamentary Ombudsman Ann Abraham recently advised that proposed payouts of between £400m-£500m were too small (about £250-£350 per policyholder) and suggested between £4bn-£4.8bn (a significant increase I think anyone would agree).
The CEO, Mr Wiscarson recently appeared on TV and basically did what I can only assume to be something akin to schoolboy maths. It goes like this... if we take the lower end of £4bn and we know that the Government are cutting costs by around 20-45% then £2bn seems like a reasonable number...for starters.
Whilst the logic is of course reasonable (from a numbers perspective) it doesn't exactly deal with what has been actually lost by policyholders.. which is the point. The cynic in me is somewhat concerned that given the above average age of Equitable Life policyholders, the longer this drags on the more of them die off and the smaller the compensation cost.
If you are an Equitable Life policyholder or know somebody that is.. please review the "urgent" letter posted on the Equitable Life website.
Is it any wonder that people lose faith in the financial services industry!
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