Salvation nears for Equitable

Equitable Life goes to the courts this week to win approval for its rescue plan after gaining an overwhelmingly positive response during consultation with policyholders.

Equitable Life goes to the courts this week to win approval for its rescue plan after gaining an overwhelmingly positive response during consultation with policyholders.

The plan will then go to all Equitable's policyholders. If more than 50 per cent of the policyholders, representing 75 per cent of the assets by value, back the proposals, then a deal to sell the business to HBoS for £750m will also go through to end the dreadful saga.

The compromise proposals would give a 17.5 per cent increase in the value of policies with guarantee annuities and 2.5 per cent to other policyholders, paid for from HBoS's £750m.

All groups would then drop their legal claims against Equitable as part of the settlement.

Equitable closed to new business a year ago after losing a court action over limiting the liabilities to guaranteed annuities.