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Standard to use float cash to boost with-profits fund

Standard Life will not demutualise until the latter part of 2006 and says it will use some of the flotation cash to boost its with-profits fund.

The firm is giving little infor-mation on timings, size of windfall payments or future dividend payments but says members will get a further update this year.

The definition of eligible members is also unclear as of yet but Standard says windfall payouts are likely to dep-end on criteria such as the value of investments and the length of time they have been a member. It is unclear whether members with several policies will get greater allotments of shares but the firm says people with joint policies will get a single allocation to the member named first on the policy rather than separate payouts.

Standard gives an overview of the changing financial climate and an explanation of the U-turn over demutualising.

It says it will send out its demutualisation proposals in the spring ahead of a planned special general meeting, after which the members’ vote will take place. The firm will seek a listing on the stockmarket after member and regulatory approval has been given.

Standard pledges to plough some of the funds raised into its with-profits fund and says it will provide cash alternatives or extra unit allocation to overseas members ineligible to hold the firm’s stock.

The Investors’ Association, previously a fierce critic of Standard, includes a note in the update to members. Director Steve Huxham says: “From being an ‘opaque mutual’, the board and senior management now engage in constructive dialogue and information is circulated quickly.”

Standard group chief executive Sandy Crombie says: “If we demutualise and float, most eligible members will bec- ome shareholders and would participate in any future success of Standard Life.”

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