DEVON policyholders who lost out on thousands of pounds in savings and pensions are closer to compensation, following the Equitable Life saga, Central Devon MP Mel Stride said this week.

MPs, including Mr Stride, who voted through the Equitable Life Payment Bill, say the measure will put in place compensation plans a decade after the insurer's near collapse in 2000.

During the debate last week, Mr Stride, who signed a victim's pledge for fair and appropriate compensation, told fellow MPs it would be 'wholly unacceptable' if compensation payments were a fraction of the real losses.

In the parliamentary debate he said: 'I have had many individuals in my constituency come to me in a terrible state because of what has happened to their pensions and their future as a consequence of maladministration and regulatory failure.

'For each one of those individuals that is a tragedy, but when we consider that one million policyholders and 1.5-million policies are involved, we see that it is not a tragedy; it is a national catastrophe, because it hits savings.'

Mr Stride added that all must be done to encourage saving if economic recovery was to remain on track, and he hit out at the previous government for allowing the Equitable Life situation to 'drag on' for so long.

He also made it clear that interim payments and means-testing should not be part of the process as this would further complicate an already complex task.

Losses to policyholders of around £5-billion resulted from the near collapse of the firm, however, a compensation figure will be announced by the Government next month, following the much-awaited Comprehensive Spending Review.