Equitable Life has decided to give back to its policyholders hundreds of millions of pounds after problems at the firm caused the value of their investments to nosedive.
The idea is to increase the value of members' with-profits policies by 12.5% for those who leave the society after April 1 or whose investments mature.
It predicts that a total of £40 million in additional payments will be made to about 30,000 policyholders in the first year, with 400,000 policyholders in total expected to benefit from the move.
Chris Wiscarson, Equitable Life's chief executive, told the Press Association: ‘We've done a lot of talking about what we'd like to do to recreate policyholder value. Today we're actually doing what we said we were going to do. May this be the start of a better future for our policyholders.’
Chairman Ian Brimecome added: ‘Getting millions of pounds of capital into policyholders' hands is what matters after a decade of distress.’