Equitable Life has doubled the boost it hands to policyholders who leave the insurer 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 company revealed a total capital surplus of £691m, up from £588m in 2012.
Equitable Life chief execu–tive 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 that the new 25 per cent payout is “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 as a result of the announcement.
Advisers warned Equitable Life members against rushing to cancel their policies because they could miss out on future capital distributions and risked losing valuable guaranteed bonuses.
Hargreaves Lansdown head of financial planning Danny Cox says: “Policyholders who have stuck with Equitable Life have finally been rewarded. Those who felt trapped by poor returns and market value reductions can now head for the exit with as much as 30 per cent 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.”