Standard Life, which is facing a challenge to its mutual status, has warned that the majority of its Irish with-profits policyholders are likely to get a windfall payout of no more than a couple of hundred pounds if a majority of policyholders vote to convert Standard Life into a plc.

"If there is an expectation out there that people are going to get £6,000 (€7,618), then that's off the wall," Standard Life finance director Mr Iain Lumsden said yesterday.

Mr Lumsden said that the £6,000 windfall figure cited by Mr Fred Woolard, the policyholder who is the driving force behind the demutualisation proposal, was based on simply dividing an assumed market capitalisation by the number of with-profits policyholders.

"In practice, individual windfalls would be proportionate to the value of policies. The lion's share would go to members with higher value policies." "Ten per cent of members would get half the windfalls," said Mr Lumsden, who appealed to Standard Life policyholders to vote against the demutualisation. He warned that if Standard Life was forced to demutualise, investors would end up 10 per cent worse off on their future life assurance policies.