Equitable action to go to court

The Equitable was once the UK's biggest private pension companies

A group representing people who lost money in pension provider Equitable Life has been given permission to take legal action against the government.

The Equitable Members Action Group has won the right to go to the High Court to take on the government over its failure to offer full compensation.

Thousands of people lost savings after the firm's near-collapse in 2000.

The Treasury, which is planning limited discretionary payments, says it has to be fair to policyholders and taxpayers.

Equitable Life, one of the UK's largest private pension providers, came close to collapse nine years ago after being ordered by the High Court to fulfil financial promises which it could not afford.

The subsequent saga saw more than a million policyholders suffer large cuts to the value of either their prospective or current pensions as the society struggled to stay solvent.

Compensation?

The Parliamentary Ombudsman, Ann Abraham, investigated the events leading up to the society's troubles and ruled last year that various government departments had been guilty of maladministration.

She also called for the establishment of a compensation scheme for more than a million policyholders.

However, the government continues to deny some of her findings, and is going only part of the way to carrying out her recommendation for compensation.

A former Appeal Court judge, Sir John Chadwick, has been asked by ministers to design a scheme that will give voluntary payments to the "hardest hit" of Equitable's investors.

"The tide of moral indignation is finally turning in our favour," said Paul Braithwaite, of the action group which has described the hardship scheme as "totally inadequate".