Equitable Life: 'It is morally corrupt'

Equitable Life: 'It is morally corrupt'

Stewart Simpson thought he had done everything necessary to secure himself a comfortable retirement. After working "bloody hard" as an accountant for 40 years, and following a huge amount of research, he put his pension cash in an Equitable Life policy. Then, a few weeks later, the insurer lost a multibillion-pound legal battle, setting off a chain of events that saw it almost collapse.

The fallout from those events early this decade has been dramatic. Simpson suffered a sharp drop in pension income and, as a result, he and his wife decided to downsize to a bungalow. Even though he had retired in 2000, he worked as a consultant for five years to supplement his falling income. "It hasn't actually been an easy retirement, and it should have been," said Simpson, 69, who lives in Woking, Surrey. It was his sample case that was investigated by parliamentary ombudsman Ann Abraham in her first inquiry into the Equitable debacle.

Simpson put £500,000 into an Equitable Life with-profits annuity in June 2000, just weeks before the insurer lost a case over "guaranteed annuity rates" sold as part of its pension plans. In 2003, the company announced savage cuts to the incomes paid to its with-profits annuity holders as it attempted to shore up its precarious finances.

He has no doubts as to who is responsible. "The people who should have spotted this problem, ie the regulators, were totally and utterly useless, and, in fact, I believe they knew there were.....continued below

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problems and did absolutely nothing about it."

Simpson believes that compensation should be paid to everyone who has lost out as a result of the scandal. But he suspects the government will fight the ombudsman's recommendations "tooth and nail". He added: "This government will never pay out because it is morally corrupt."

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