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Falls on the stock market have led pensions giant Aviva to withdraw a £1 billion payout promised to a million policyholders last year.
The insurance group said sharp falls in the value of equities meant the original offer was "no longer fair to both policyholders and shareholders".
Prior to the announcement, the group had hoped to pay more than 220,000 policyholders £1,000 to £3,500 this summer, with a further 700,000 in line to receive between £400 and £1,000.
Aviva, parent group of Norwich Union, reported a 1% rise in new UK business in its full-year sales figures.
The group hopes it can "restructure" the payout offer, which was intended to distribute surplus funds accrued over several years in Norwich Union with-profits funds.
Lengthy negotiations between Norwich Union and the independent policyholder advocate had already delayed the original offer to its policyholders.
A spokesman for Aviva said: "We realise that this will be disappointing for our eligible policyholders. It does reflect the nature of the current exceptional investment market conditions. We expect to be able to update policyholders in the next few months."
The 1% rise to £11.86 billion in its UK life and pensions business new business figures showed growth had stalled from its 5% hike in 2007.
Aviva, which has switched its reporting basis, said total life and pensions business rose 11% to £36.28 billion.
Under its previous reporting method, the results would have shown a 9% rise in worldwide business to £34.58 billion - better than expected in the market.
The group also sought to reassure shareholders over its capital strength - a key concern for insurers given the stock market volatility.
It said the surplus it is required to hold by regulators had in fact risen by £100 million since last September, to £2 billion at the end of December.
Copyright © Press Association 2009
