Equitable Lifes guaranteed annuity rate holders are being offered an average 17.5 per cent uplift and non-gar holders a 2.5 per cent increase as part of the compromise deal published today.
In accepting the uplifts, gar holders would give up their guarantee and non-gars would give up mis-selling claims.
The gar uplift had been expected at around 20 per cent, but has been reduced to pay off the non-gar mis-selling claims. These claims could be as high as £850m in total.
The £250m payable by Halifax if the compromise is agreed will be used to help fund the uplifts.