Equitable Life policyholders with a 'with-profit' plan are in line to receive an extra payout of around £9,500 in January 2020.

As reported by The Daily Mail, those with 'with-profit' policies will see their pension pots increase by around 70 per cent.

It is part of a plan to compensate those affected by the scandal which saw the mutual insurer on the brink of collapse in 2000, which saw many policyholders lose out on portions of their savings.

There are still around 126,000 Equitable Life customers with 'with-profit' policies, with an average pot of approximately £14,000.

In order to receive the payouts, policyholders will be switched to 'unit-linked' plans, which rise and fall with the value of investments.

Savers will be notified of the exact value of of their new policies by the end of January 2020.

Equitable Life expected its 'with-profit' policies to absorb the shocks of the stock markets by adding guaranteed bonuses to savers' pots.

However, it miscalculated the benefits and was unable to honour its promises, leading to its near collapse.

Equitable Life chief executive, Simon Small, told The Daily Mail: “There is a sense of quiet pride. Most of the staff were here when Equitable closed and so they are conscious that policyholders really suffered and went through a lot of anxiety.

“This is a great outcome for policyholders.”

Equitable Life is set to be taken over by Utmost Life & Pensions and rebranded under the new company.

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