Victims of collapsed pension fund still fighting for compensation as Treasury keeps £178m - 'Waiting for us to die'

Equitable Life closed in December 2000 after being unable to meet guaranteed bonus payments on pension products.

Its failure triggered years of investigations into regulatory failures and Government oversight.

In 2010, then-chancellor George Osborne announced a £1.5billion compensation scheme for affected policyholders.

At the time, Mr Osborne said: "A balance had to be struck between being fair to policyholders and fair to taxpayers."

The Parliamentary Ombudsman had concluded that savers had suffered losses of £4.1billion.

The compensation package therefore covered only around one third of the total losses identified.

Susan Wood, 78, from Sheffield, said she invested as much as she could afford in Equitable Life because of its reputation.

"Everybody knew about Equitable Life. It was respectable, it was beloved by the middle classes."

She said she lost about £23,000 when the company collapsed.

Adjusted for inflation, that figure would be worth more than £44,000 today.

Ms Wood said she had been advised to consolidate her savings into with-profits annuities.

"What he was suggesting sounded seductive, so I did it, and within weeks the company had started to fold," she explained.

She said she had been building up her pension after divorcing in her fifties while working as a self-employed businesswoman, and the resulting length of time taken to resolve the issue has been deeply frustrating.

She said: "I'm sure they're waiting for us to die.

"It seems to take at least 20 years, if not more, for any action."

Terence Grantham, 94, a former bookbinder from Lincolnshire, said he also suffered major losses.

Mr Grantham said he sought professional advice after running his own business for more than five decades.

"I had an interview with a chap from Equitable Life who made everything sound as though it was God's answer to what I wanted."

He said he was initially offered a withdrawal rate of 15 per cent from his lump sum.

Mr Grantham later agreed to a withdrawal rate of seven per cent, which was expected to deliver an income of about £400 a month.

Adjusted for inflation, that would now be worth more than £760 a month.

Under the Government’s compensation arrangements, Mr Grantham currently receives about £190 per month.

Mr Grantham said: "It became a Ponzi scheme," he said: "offering so much to get people in, just to pay off the other policyholders."

He added: "We can manage but the niggle is that over the years we seem worse off."

Brian Raper, 84, from near Skipton in North Yorkshire, said he received confirmation of his losses in 2012.

A former textile manufacturing worker, held two Equitable Life policies, official documentation showed his losses totalled £89,815.

His compensation payment amounted to £20,118.

The letter stated: "To meet affordability constraints, payments have been set at a 22.4 per cent proportion of the relative loss."

Mr Raper said the outcome affected his plans for retirement.

"We couldn't do some of the things we wanted to."

"When you've finished work, you're expecting to be able to use some of the savings you've made."

He criticised the level of compensation provided, saying: "Publicly acknowledged debts to individual citizens can and should always be settled both speedily as a matter of policy, and without questions of affordability.

"To pay less than a quarter of the debt is really an insult."

The Equitable Members Action Group has examined Government documents and freedom of information responses.

The group said payments to with-profits annuity holders were about £54million lower than projected in 2022 to 2023.

It said around 100,000 policyholders could not be traced to receive one-off payments.