Thousands of Scottish Equitable savers in line for £60m compensation

Scottish Equitable customers will get a share of £60million in compensation following an investigation by the City watchdog.

The Financial Services Authority said the life insurer had identified some 300 failings with its administrative systems that resulted in over 200,000 people having their pensions slashed or missing out on benefits.

The company was also handed a £2.8million fine for the problems it caused, which included failing to issue policyholder documents and wrongly calculating guaranteed minimum payments and future benefits.

Pay back: The life insurer must give compensation of £60million to affected customers

Pay back: The life insurer must give compensation of £60million to affected customers

Some £30million, half the total amount, will have been paid by the end of the year.

Aegon, which bought Scottish Equitable in 1994, estimates to have paid the rest of the lost money by the end of next year. 


It said it fully accepted the watchdog’s findings, adding: ‘The immediate priority of the programme has been to deal with issues that resulted in financial detriment and to return affected customers, wherever possible, to the financial position they would have been in had the issue not occurred and, if not, to pay them appropriate compensation.’

The problems were uncovered by Scottish Equitable in May last year when it conducted a review of its systems.

It began repaying the lost money as it became aware of the failings and brought the issue to the FSA’s attention.

The City watchdog said the company failed to issue policyholder documents to 238,000 people and wrongly calculated guaranteed minimum pension payments and future benefits for 774 customers.

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