Scottish Widows vote for pounds 5,600 Lloyds windfall

SCOTTISH WIDOWS members have voted overwhelmingly in favour of a takeover by Lloyds TSB, triggering bumper windfalls for 1.6 million policyholders.

Some 900,000 members who have with-profits life policies or pensions with the firm stand to get an average of pounds 5,600. The headline figure masks wide variations, because bigger bonuses go to people who have invested more, or been with the company longer. A handful of pay-outs are likely to top pounds 100,000. The remaining 700,000 members with unit-linked policies will each get a flat windfall of pounds 500. There will be no pay-out to those who just have Widows' credit cards, PEPs or bank accounts.

Around 400 people attended Widows' special general meeting in Edinburgh yesterday, and there was some criticism that the pay-out system handed out too much to the top few.

But Mike Ross, Scottish Widows chief executive and now deputy chief executive at Lloyds TSB, said an additional pounds 1.3bn reserve would gradually be distributed in the form of terminal bonuses. "Those who have not been with us very long will get a proportionally better share of that," he said.

Almost 97 per cent of voting members approved the takeover, on a turnout just below 43 per cent. The result brings down the curtain on more than 180 years of mutuality at the life insurer, which was set up to look after widows and orphans created by the Napoleonic wars.

Completion of the pounds 7bn deal is planned for 3 March. Demutualisation is expected to be formally approved in the Scottish courts by February, and members should receive their pay-outs from June.