Biggest Scottish Widows windfalls exceed £100,000 as cheques go out

ABOUT 100,000 policyholders of Scottish Widows, the mutual life company that is paying out windfalls following its sale to Lloyds TSB, will receive cheques for more than £10,000. Scottish Widows yesterday finally started posting the payments to its 1.6 million qualifying members.

ABOUT 100,000 policyholders of Scottish Widows, the mutual life company that is paying out windfalls following its sale to Lloyds TSB, will receive cheques for more than £10,000. Scottish Widows yesterday finally started posting the payments to its 1.6 million qualifying members.

The payout - which will instantly make a handful of policyholders more than £100,000 richer - is the largest bonanza for members of a UK mutual life company converting to a public company.

A company spokesperson said: "Some members have more than one policy - for example, an endowment for their mortgage as well as a pension - which will boost their payout. But a single-pension policy which has had £100 contributions a month for 30 years will receive £116,000.

The first policyholders to benefit will receive their cheques today, with the mutual hoping to pay all its qualifying members within the next two weeks. On average, members will receive £5,701.

However, Scottish Widows - which has already delayed the payouts by about two months - yesterday said that in some instances the windfall cheques may not reach all members until mid-September.

The company has set up a helpline for those who do not receive their letters within the next two weeks.Staff operating the helpline will not be able to tell policyholders how much they are to receive, the company advised.

Scottish Widows yesterday would not say whether it was sending out the windfall cheques in alphabetical or geographical order, in order to prevent any interception of the letters.

The insurer revised upwards the total amount of money it will be paying out from £5.4bn to £5.8bn. While about 900,000 people will receive an amount from a variable scale, about 700,000 members will receive only a flat £500 payout.