'Why I should be compensated'

By Julian Knight
BBC News Online personal finance reporter

Ann Berry fears her retirement income will be cut further

Ann Berry, 65, a former physiotherapist from West Sussex, should be enjoying her retirement.

But as an Equitable Life annuity holder she has seen her £6,000 pension slashed by nearly a quarter in the past two years.

"It is very worrying, I did everything the government asked me to do - I saved hard for my retirement," Ann told BBC News Online.

"Now my pension is being used by Equitable as a cash cow to pay for promises it couldn't keep."

Promises

The Equitable Life scandal has become a byword for mis-selling and financial ineptitude.

You can not expect young people to save if they face being let down like we have been

The Equitable made financial promises to a large group of its own policyholders that it could not afford to honour.

The world's oldest mutual life assurer was brought to the brink of bankruptcy and cut the pensions and retirement savings of its policyholders to stay afloat.

Lord Penrose was asked in 2001 by the Treasury to investigate the history of the Equitable and find out how the mutual insurer came to the edge of financial ruin.

Following an exhaustive two and a half year inquiry the judge deemed senior managers at the Equitable had been involved in a "culture of manipulation and concealment."

Regulators were found to have adopted an "inappropriate" light-touch to their task as the financial position of the Equitable worsened.

I have to forgo life's treats - holidays, meals out, even presents for the grandchildren

However, crucially, regulatory authorities were not deemed to have been negligent.

'Justice' wanted

Ruth Kelly, Financial Secretary to the Treasury ruled out compensation for Equitable policyholders like Ann.

Ann is unhappy at the government saying no to compensation and says she wants justice.

"Penrose has found there was a regulatory failure - they were asleep on the job. It is a question of the credibility of the whole UK savings system," Ann said.

" You can not expect young people to save if they face being let down like we have been," Ann added.

Ann counts the cost of putting her faith in the Equitable every day.

"I have to forgo life's treats - holidays, meals out even presents for the grandchildren.

"I'm convinced things are going to get worse the Equitable is still in a mess and I thoroughly expect to have my pension cut again and again."