The Equitable Life Payment Scheme will close to new claims on 31 December 2015 under measures announced in the summer Budget.
A note in the 123-page Budget document said the government planned to make further efforts to find remaining policyholders due £50 or more, while with-profits annuitants would continue to receive yearly payments for their lifetimes.
The scheme, which began making payments in 2011, has paid out about £1bn to some 87 per cent of eligible policy holders.
The government also announced that eligible policy holders in receipt of pension credit who received 22.4 per cent of their relative loss would see their lump sum payment doubled, with payments made in early 2016.
Chancellor George Osborne said: “We are going to use the remaining funds available in our Equitable Life Payment Scheme, as it closes, to double the support we give to those policy holders on pension credit who most need this extra help.”
The latest changes to the Equitable Life compensation scheme come after last month the government made yet another appeal for policyholders to come forward, stating that there are about 136,000 people who are still due a payment.
In a statement, the payment scheme confirmed that all policyholders who could be traced have been.