Policyholders who lost their life-savings when their pension company collapsed have said that Government compensation doesn't go far enough.

More than 1000 Equitable Life savers in Brighton and Hove lost thousands of pounds each when the life insurance firm collapsed in 2000.

The Government today announced that the first cheques will be sent to policyholders on June 30 as part of a £500 million payout this year.

In total the Government has set aside £1.5 billion over three years but some policyholders won't find out if they are due compensation for another year and many will miss out completely.

In 2008 the Parliamentary Ombudsman, Ann Abraham, said the Government should apologise to Equitable Life policyholders and compensate them for any money they lost as a result of its regulatory failure.

Stephen Wynn, the coordinator for the Brighton, Hove and Lewes branch of the Equitable Members Action Group, has been running the group for 10 years and said he had spoken to savers who had lost up to £1 million.

He said: “It's good news but a long way short of what we hoped for.

“We are hoping the Government pay back the full £6 billion owed and we will continue to try to make that happen.

“At the moment a lot of people might get back only 10-20% of what they have lost or may get nothing at all.”

Mark Farley, 45, from Hove, lost £27,000 from around ten years of saving which would be worth £80,000 to him today with compound interest.

He said he didn't expect to receive any money because of his age.

He added: “I'm being punished for saving for my pension at the age of 25 like the Government told me to.

“I'm supposed to feel grateful that I will have another 20 years to pay back all the money I lost.

“We have been stitched up and we just want a fair share of what they still owe us.”

For more information visit www.emag.org.uk