The Government has said that it will begin sending cheques to Equitable Life policyholders from today.
It follows last month's pledge that payments would begin before the end of June.
Former policyholders have been battling to reclaim funds they lost when the business almost went bust a decade ago.
Hundreds of policyholders will receive cheques in the coming weeks at the start of a three year payment programme, and the Government has set aside half a billion pounds for the Equitable Life Payment Scheme over the coming year.
Policyholders do not need to get in contact at this time – the Government will be writing to all the eligible policyholders it can by June 2012 to provide information about their personal status within the Scheme.
In accordance with the Independent Commission on Equitable Life Payments' recommendations, the Scheme will prioritise the oldest policyholders for earlier payment, along with payments to estates of deceased policyholders.
The Government said that it has moved swiftly to make sure that the Scheme is in place as quickly as possible because of the years of frustration and waiting that policyholders have endured.
"After a decade of delay and indecision, I am delighted that we're beginning to send out cheques to eligible Equitable Life policyholders," said Mark Hoban, Financial Secretary to the Treasury.
"We will pay out £1.5 billion to ensure that policyholders receive the justice they deserve."
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