Rodger Watts lost thousands invested in Equitable Life
The government will compensate those policyholders "hardest hit" by the collapse of life insurer Equitable Life, the Treasury has announced.
Minister Yvette Cooper also apologised to the million-and-a-half policyholders who had lost money.
A former appeal court judge will advise the government on who will receive payment and how much.
Opposition MPs and campaigners, however, have said the scheme does not go far enough.
Liz Kwantes, of the Equitable Life Members Help Group, said she was worried about further delays.
"By the time they decide how to measure it, we've lost another year," she said.
"A lot of people have lost a lot of money. People have had a hard time - some have lost houses, their health has gone," she added.
More than eight years after the Equitable closed to new customers, the government has admitted that some regulatory bodies were partly to blame.
"We agree there has been maladministration in several areas and that government action is merited," said Ms Cooper.
"And I wish to apologise to policy holders on behalf of the public bodies and successive governments responsible for the regulation of Equitable Life between 1990 and 2001, for the maladministration we believe has taken place," she told MPs.
We want to focus on those who have been hardest hit
And she told MPs that policyholders could not expect to be fully compensated for all their losses.
The former appeal court judge Sir John Chadwick has been asked to advise how the payment scheme should work.
He has been asked to advise the government "as swiftly as possible" on the extent of relative losses by the Equitable policyholders, the payments that might be due to any maladministration, and which groups of policyholders had suffered most.
"We want to focus on those who have been hardest hit," Ms Cooper told MPs.
"We would expect it [the scheme] to include looking at the extent of somebody's losses, how great the losses were but also perhaps looking at how great they were as a proportion of their income," she explained.
Vanni Treves, the chairman of Equitable Life since 2001, offered a "muted welcome" to the plan, and said he would help by offering advice to Sir John, as well as full access to the society's records.
But he said it would be wrong for there to be any element of "means testing" in the eventual payouts.
"The Ombudsman was very clear that losses that were suffered by huge numbers of policyholders should be made good, independent of the financial situation of individual policyholders," he said.
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