news story

19th January 2009

Local MP Slams Government "Heartlessness" Over Local Pensioners' Losses

Northavon MP and Lib Dem Pensions Spokesman Steve Webb has condemned the Government over its failure to look after local pensioners who have lost out over the collapse of Equitable Life.

Many hundreds of South Gloucestershire pensioners had savings with the troubled firm and are now getting substantially reduced pensions as a result of its collapse. A series of reports found that one of the main problems was that the company was not being adequately supervised by the Financial Services regulators, and the Parliamentary Ombudsman concluded that policy holders should be compensated.

But the Treasury has now announced that any compensation scheme will be very limited. Payments will be on an 'ex gratia' basis, which means that the Government is not admitting liability in the affair, and will only go to those most severely affected.

A new body will be set up to process cases, but with a million policy holders nationwide - some of whom have died since the company folded - it is not know how long it will take to pay compensation.

Steve Webb said:

"Local pensioners and savers have contacted me in large numbers to tell me their experiences of saving with Equitable Life. Many have lost large sums of money through no fault of their own.

"They assumed that the Government would ensure that the activities of big companies like Equitable Life would have been properly regulated, but they were sadly let down. The half-hearted compensation scheme that has now been proposed is wholly inadequate and is a heartless way to treat worried savers who have lost so much".

The MP said he would continue to challenge the Government over its failure to pay proper compensation to those who had lost their savings with Equitable Life. He has invited local people who saved with the company and want to know where they stand to contact him by e-mail at steve@stevewebb.org.uk or by writing to him at his constituency office in Yate.