400,000 Equitable Life policyholders have the opportunity to receive a 12.5 per cent boost to their pension, if they move their investment to another firm.

From 1 April 2011, investors with maturing policies can benefit from the additional bonus to their with-profits pensions policies, on top of the already promised government compensation scheme.

Chris Wiscarson, chief executive of Equitable Life, said the embattled mutual has done a lot of talking about what it would like to achieve, but has now taken actions to prove its commitment to improving the situation for shareholders.

He said, ‘Today we are actually doing what we said we were going to do. May this be the start of a better future for our policyholders.’

Equitable Life estimates that around 30,000 of the 400,000 policyholders will take up the option within the first 12 months.

However, today’s news will come as little comfort to around 600,000 investors who were informed their investments would be worth less than they were promised when the society nearly collapsed in 2000.

Last October, the government announced total compensation of £1.5 billion, payable free of tax commencing in mid-2011.

There was widespread disappointment at the announcement as the compensation represents only one third of the total losses suffered.