Investors' board kept in business

Martyn Cornell

The Treasury has stepped in with a Pounds 17 million guarantee after a High Court decision left the Investors Compensation Board short of cash, writes Martyn Cornell.

It looked early last week as if many victims of the personal pensions scandal, which included thousands of teachers, would have to wait even longer before getting any compensation. So, too, would people hit by the collapse of home income plans (see story, left).

The Sun Life insurance company is taking the Personal Investment Authority to the High Court over the way compensation to victims of financial scandals is being paid out.

The pending High Court case means that the PIA cannot collect money from companies like Sun Life to fund the Investors Compensation Board until the case is heard. The board is already short of cash and had warned the case could mean it would not be able to make payments for many months.

However, by the end of the week the Treasury had guaranteed the ICS enough money to keep it going.

Sun Life argues that it and other insurance companies should not have to bail out the victims of defunct financial advisers. People who were given wrong advice by companies still in existence would not be affected by any problems at the ICS.

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