The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, comments on a report by the National Audit Office (NAO) on administering the Equitable Life Payment Scheme
The Rt Hon Margaret Hodge MP said:
"The scheme to repay just over a million former Equitable Life policy holders by April 2014 has gone off track and will not pay everyone who is owed. The desperate rush to start making payments by June 2011 meant the administrator, NS&I, tried to run before it could walk. As a result there have been mistakes and delays.
"Policy holder details provided by Equitable Life were incomplete, and in a fifth of cases out of date. Given the government’s commitment to repay everyone eligible under the scheme it is disgraceful they will never pay up to 20% of former policy holders because they can’t find them. These conscientious savers should not lose out.
"The rate which people are being paid at is simply not enough to deal with everyone in time. So far, hardly any payments have been made to group schemes, which make up half of all former policy holders. Given the delays policy holders have faced, I would have expected NS&I to keep them well informed.
"However the reality is that communication has been unacceptably poor. In some cases people were told they would receive amounts that turned out to be completely wrong. To date only 35% of payments have been made, but 72% of the budget spent.
"Given this, it seems naively optimistic that the Treasury is predicting it will spend only £1.5 million more than planned.
"The Treasury and NS&I need to take action now if they want to make all the payments without costs spiralling out of control. The Treasury must make sure that NS&I is able to make the remaining payments in time to meet the April 2014 deadline.
"It also needs to push NS&I to track down as many outstanding policy holders as is practicably possible so they can also be paid."
Image: PA - Dominic Lipinski