THOUSANDS of Scots who have Norwich Union with-profits policies will receive a special bonus in a £2.1billion windfall.

Under the move, someone with a typical with-profits bond into which they paid £30,000 in 2001 will receive a special bonus of £4500.

A policyholder with a 25-year endowment taken out in 1985, into which they paid £50 a month, will have around £3735 added to their policy.

The insurance giant is distributing £2.3bn of its so-called inherited estate, with 90% going to its with-profits customers and 10% returned to shareholders.

Under the move, 1.1million qualifying policyholders in the group's CGNU Life and CULAC with-profits funds will receive a payout worth around 10% of their policy value.

The money will be paid in three instalments, with the first one made this year, followed by payouts in 2009 and 2010.

Shareholders will receive £230m of additional capital, which will also be paid out in three goes.

The group said it had been able to make the distribution as a result of the strength of its with-profits funds, and following recent changes to its investment strategy.

This has freed up a significant part of the surplus capital built up in the funds over the years.

The group said the move was likely to increase the number of endowment mortgage customers whose policy would be large enough to repay their home loan when it matured to 20%-25%, including its endowment promise, under which it pledges to make up some of the shortfall.

Before today's move just 10% of people had policies that were on track, with homeowners facing an average shortfall of only around £1400.