Equitable Life is to double the capital distribution for with profits policyholders to 25% and remove the 5% exit charge.
From 1 April, the distributions will be made to the society’s 345,000 in a move chairman Ian Brimecome dubbed a ‘momentous step’.
Brimecome added: ‘This is a further momentous step for the society. We consider the new capital distribution of 25% to be the best example of recreating policyholder value at the society for many years.’
Since April 2011 Equitable has paid a 12.5% capital distribution to its with profits investors and the 25% payout will apply to policy values as at 31 December 2013.
Equitable chief executive Chris Wiscarson (pictured) said: ‘Over the past decade, there have been many reasons for policyholders to the leave the society but one big reason to stay. This is it.’
Danny Cox, head of financial planning at Hargreaves Lansdown, added: ‘Policyholders who have stuck with the Equitable have finally been rewarded. Those who have felt trapped by poor returns and MVRs can now head for the exit with as much as 30% more in their pocket. Importantly, any right to compensation will be retained.
‘If nothing else, the 345,000 Equitable Life policyholders should take this opportunity to review their policies and check whether they remain suitable for their planning.’