The Equitable Life Payment Scheme (“the scheme”) started to make payments in 2011 and was due to close in 2014. The then Chancellor extended the scheme in 2014 to maximise the number of payments that could be made. He subsequently announced in the summer Budget 2015 that the scheme would close to new claims on 31 December 2015. From the beginning of 2016, the scheme began the process of winding down and completing all remaining claims. As the majority of these claims have now been paid, the scheme has today published its final progress report, which can be found at: www.gov.uk/equitable-life-payment-scheme.
The report gives an outline of the history of the scheme, details the significant efforts that have been made to trace and pay as many policyholders as possible, and provides a distributional analysis of the payments that the scheme has made over its four years of operation.
The report gives the final figures compiled by the scheme, which show that, as at 31 August 2016, the scheme has issued payments of over £1.12 billion to 932,805 policy-holders. This means the scheme has now issued payments to 90% of eligible policyholders. All the payments issued by the scheme have been free of tax.
It should be noted that the closure of the scheme to new claims will not affect the yearly payments made by the scheme to with-profits annuitants, which will continue for the duration of those annuities. The scheme has written individually to all with-profits annuitants to make them aware of this.
In the summer Budget 2015, the then Chancellor also announced that, as part of scheme closure, payments to non-with profit annuitant policyholders who were in receipt of pension credit would be doubled in early 2016. In fact the scheme succeeded in making the majority of these additional tax-free payments in December 2015, and all were completed by March 2016, providing additional help to this vulnerable group of policyholders.