About EMAG’s campaign for justice

EMAG (Equitable Members Action Group) was formed in 2001 to fight for compensation for the victims of the Equitable Life scandal.

After a decade of engagement with numerous enquiries, the European Commission and the Parliamentary Ombudsman, plus a number of legal actions, EMAG achieved a measure of success in getting compensation into the manifestos of both the Conservatives and The LibDems who went on to form the new coalition government in 2010. However, the amount put on the table was restricted to £1.5bn when the losses of victims were £4.1bn.

It is certain that without the persistence of EMAG, victims would have got nothing.

The campaign continues.

The facts

  • 2008 The PO found the regulators guilty of a DECADE of maladministration
  • 2010 The government accepted that victims’ losses amounted to £4.3bn, (subsequently refined down by the Treasury to £4.1bn) but only allocated £1.5bn for compensation.
  • 2011 The government allocated £625m to those already receiving an annuity, leaving only £775m to share among one million other victims. This meant that people got just 22.4% of the money they had lost. Their OWN money, taken by false pretences.

The current position

  • More than 100,000 victims have not been traced or paid.
  • 9,000 annuitants have been excluded from full compensation. Rectifying this would cost around £100m.
  • 895,000 traced victims want the unpaid debt settled for the losses incurred through no fault of their own. This would cost £2.6bn.
  • £140m of the £1.5bn remains in the Treasury’s pockets.

What victims want

  • Pay the missing 77.6% now to 895,000 victims - £2.6bn new money
  • Pay the 9,000 pre-92 WPAs ex-gratia from the £140m underspend.

After 15 years of campaigning and promises from all political parties, nearly a million people are still being told that their compensation is limited to just 22% of the loss they are recognised to have suffered. The amounts have been frozen since 2009 with no interest or uprating for inflation.

They have been expected to accept only a fraction of the losses incurred on the money they had set aside for their retirement.

Just £1.5 billion was allocated to policyholders despite the accepted relative loss amounting to more than £4 billion. Now the scheme has closed, Treasury figures indicate the unpaid relative loss for all traced policyholders to be £2.6 billion.

The victims appear to have fallen between the cracks of the financial crisis which saw our banking corporations bailed out whilst hardworking and responsible pensioners were left to suffer. George Osborne effectively stood up in the House of Commons in October 2010 and said that despite accepting the Ombudsman’s findings in full, as a consequence of the financial crisis, the UK could not afford to allocate more than £1.5 billion for victims.


Borrow the money now and write it down over 5 years. Take the last known address and send a cheque for the remaining 77.6%. The Treasury have the addresses of all those they paid and have already done the calculations. They just have to take the individual’s loss figure, subtract the amount already paid, and send a cheque for the balance.

Demolishing objections to payment

It is 7 years since affordability was used an excuse to reduce the payments to victims. During the 2008 financial crisis £133 billion of taxpayers’ money went into preventing our banks from failing.

According to the NAO £76 billion is still to be recouped. The sales process is underway to recover £15.65 billion from Bradford and Bingley assets which have been earmarked to pay back the Government loan to the FSCS. However, a recent FT article suggests only £12.5bn of mortgages could be sold as the remainder is understood to comprise non-performing loans. The taxpayers’ stake in Lloyds has now been reduced to £2bn but we still have a £45bn (72%) stake in RBS. At current share values, the taxpayer will end up losing £15bn - £22bn on RBS alone.

To add insult to injury, the Treasury is somehow able to find approximately £11-13 billion every year to fund the shortfall in unfunded public-sector pensions on a deficit that has now risen to £1,493 billion (ONS).

£2.6bn is a small sum compared to £800bn annual public expenditure and a National Debt heading towards £2 trillion!

Background facts

  • The average pension pot before the fund cuts was £20,000. Equivalent to a £14 a week pension at current annuity rates. *Age 65 single life, 3% annual indexing.
  • The largest cohort of traced victims (736,000 people) had less than £20,000 in their pension pot.
  • Another 158,000 traced people had larger pots and have lost more.
  • Many of Equitable’s savers and pensioners were nurses, teachers, civil servants, shop workers and postal workers with AVCs, plus some small business owners who had no choice but to set up a personal pension.

£20,000 pot - only 5.5% repaid of total pension from 24% losses

Pie Chart