Pensioners fear cut in Equitable Life payout

In May, members of the Equitable Members Action Group (EMAG) celebrated after the Queen outlined a bill promising to reimburse those left penniless when the company nearly collapsed in 2000.

But rumours in the national press moot a total payout of 1 billion - well below EMAG's own estimate of 4.67 billion lost.

Ray Bittan, leader of Bexhill's branch of EMAG, says Treasury officials' refusal to deny the rumours makes him feel "pretty sick", and warned the town's pensioners could be looking at receiving 20p for every 1 they had been expecting.

"Just when we thought things were going well we find that all is not as we expected," said Ray.

"We've already waited 10 years, and if we are then paid a small fraction of what we have lost everyone who gets compensation will be pretty disatisfied.

"We are going to fight this to the hilt and we want the government to know we are not going away."

The final figure will be confirmed when a report is given to the House of Commons on July 15, but the silence of Treasury staff is worrying local pensioners.

Ray Hamilton, of Clavering Walk, lost around 24 per cent of the value of his pension fund when the firm collapsed.

At 61, he has not taken his pension yet, and is hopeful the returns might still improve, but is dismayed at the prospect of losing up to 80 per cent of his compensation.

"When you've lost that amount, it's very difficult to re-coup," he said.

"Any compensation would be very welcome to make up that shortfall. But our worry is the compensation we eventually get offered will be a fraction of what people have lost.

"We could be talking about a fifth of our total losses. Even though we've got a new government we feel we may not be treated as fairly as we could be."

Bexhill's MP, Greg Barker, has been a vocal supporter of the EMAG cause since before he became a minister in the coalition government.

He said: "The new government has confirmed its commitment to making fair and transparent payment to Equitable Life policyholders, through an independently designed payment scheme.

"While the government believes the design of the scheme should be developed by an independent commission, two key points can be confirmed: that there should be no means testing; and that the dependents of deceased policyholders should be included in the scheme.

"I appreciate that there is substantial concern in relation to Equitable Life and can assure you that, in contrast to the last administration, the new government is working hard to address the situation as quickly as possible."