Equitable Life has doubled the boost it hands to policyholders who leave the insurer from 12.5 per cent to 25 per cent and scrapped its 5 per cent exit charge.
The move, which will affect 345,000 with-profits policyholders from 1 April, comes after the closed-book provider revealed a total capital surplus of £691m, up from £588m in 2012.
Equitable Life chief executive Chris Wiscarson says: “Over the past decade, there have been many reasons for policyholders to leave the society, but one big reason to stay. This is it.”
Equitable Life chairman Ian Brimecome adds: “This is a further momentous step for the society. We consider the new capital distribution of 25 per cent to be the best example of recreating policyholder value at the society for many years.”
Earlier this month, Money Marketing revealed concerns about a possible mass exit of policyholders following today’s announcement.
Advisers warned Equitable Life members against rushing to ditch their policies.
Investment Sense marketing manager Phillip Bray says: “Policyholders need to be very careful here. There is a risk that the incentive of short-term gain will see people pull out of a fund that is actually right for them over the long-term.”