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How do you work out how much someone is paid?

The Scheme will calculate a payment amount for every eligible policy, based on any Relative Loss that policy has made. For more information see "What is a Relative Loss or Gain?"

The Scheme has detailed rules for calculating payments in relation to the Relative Loss, set out in The Equitable Life Payment Scheme design document. Relative Losses on With-Profits Annuities (WPA's) will be covered in full (see How is Relative Loss calculated for WPA policies?).

For Relative Losses on AWP or CWP policies:

  • If your policy ended before 31 December 2009, then the Scheme takes the Relative Loss value accrued in the eligible period and applies a fixed 4% per year interest up until 31 December 2009;
  • Policyholders will receive a pro rata amount of 22.4% of their total Relative Losses. For more information see Why are AWP and CWP policyholders paid a pro rata amount of 22.4%?;
  • If 22.4% of the total Relative Loss is less than £10 then no payment will be made. This is to avoid disproportionate administration costs;
  • If individuals have more than one AWP or CWP policy then Relative Losses will be offset against Relative Gains on all of these policies. This means that any Relative Loss would be reduced if a policyholder has other policies that have made a gain. For more information see How does offsetting work?

 

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