Scottish Widows to pay GAR holders

Reversing its previous stance in the light of the House of Lords ruling on Equitable Life, Scottish Widows (acquired by Lloyd’s TSB in 1999) will pay £1.4bn compensation to 200,000 guaranteed annuity rate (GAR) pension policyholders from a preexisting special fund. Insurance analyst Ned Cazalet suggested GARs could eventually cost life insurers £15bn, more than the £13.5bn of misselling.