Equitable Life: 20pc of savers may never be found Paul Weir, of the Equitable Members" Action group, said: "It's a mess. It is shocking that up to 200,000 victims may never get their money. I am still hearing from people who are traceable, they have called the scheme and they haven't had a cheque. The individual stories are very sad, even if the bigger issue is partly being dealt with. When The Daily Telegraph began to report problems at Equitable in 1998, the insurer wrote to all its policyholders urging them to "ignore ill-informed reports in the press." But it eventually lost litigation against its own policyholders when the Lords ruled against its practice of cutting with-profits payouts where policyholders asked for guaranteed annuity rates to be honoured in full. Equitable was, in effect, an insurer which failed to arrange adequate insurance against the risk that interest rates would fall, rendering the retirement income it promised to pay unaffordable. Labour governments consistently refused calls for compensation, but Margaret Hodge, the Labour chair of the Commons Public Accounts Committee, accused the Treasury of being "naively optimistic" about the administrative cost of delivering compensation. She urged immediate action to stop the bill "spiralling out of control." She said: "Given the Government's commitment to repay everyone eligible under the scheme it is disgraceful they will never pay up to 20pc of former policy holders because they can't find them." The report acknowledged that the Government has faced a "difficult challenge" as the records it had to go on were old and incomplete. Because so many policyholders have died during the intervening years, NS&I is working with the Probate Office to try to identify beneficiaries. However, the Probate Office can only give information on 500 cases a week and there are up to 15,000 cases left to process. The NAO reports that the Government hit its original target of making the first compensation payments by June last year but says the scheme has been hit by "severe delays" since then. Some 407,000 payments totalling more than £577m have been distributed during the past two years. More than 55,000 payments would have to be made every month for the scheme to hit its target completion date next March but it has managed little more than a third of that - or 19,000 payments a month - to date. More than 7,000 policyholders have complained. The Government set aside a pot to compensate existing and former policyholders at the society after the Parliamentary Ombudsman identified 10 instances of maladministration by regulators and Whitehall officials in relation to Equitable. The scheme was set up to compensate those who bought policies between 1992 and 2000.