The Government has said it will set aside £1.5 billion to pay compensation to Equitable Life policyholders affected by the company’s financial implosion.
From the information currently available it seems £620 million of the money will be used to compensate those with guaranteed annuities in full, leaving £880 million for everyone else.
So unless you're a guaranteed annuity customer compensation could be thin on the ground - I'd guess less than half actual losses. On the bright side it appears the payment will be tax-free – you’d expect them to be, but there were fears the Government would do otherwise.
Compensation levels are expected to be announced early next year with payments commencing in the summer. The process is supposed to be automatic, so affected Equitable policyholders should expect to receive information in the post once the Government has finalised the details - if you're in this boat then make sure Equitable Life has up to date contact details for you.