Standard Life has trimmed the price range it is quoting for its shares when they come to the stock market next month - and with it the likely value of cash windfalls for those of its with-profit policyholders who decide to sell their "free" shares at the outset.

The new range of 210p to 270p - indicating an average windfall worth about £1,500 - is pitched wider than the original 240p to 290p, as well as 9.4 per cent lower at its mid-point, to take account of the uncertain investment climate and the fall in the stock market since early May.

The final price will be announced on July 9. Yesterday the spread-betting book-maker Cantor Index suggested it would come out at the bottom of the range, between 210p and 220p.

The new range values Standard Life at between £4.35 billion and £5.25 billion, ensuring it of a place in the 100-share Footsie index and making it Britain's fifth-largest listed insurance company after Aviva, Prudential, Legal & General and Friends Provident.

Explaining the basis for the new price range, Sandy Crombie, Standard's chief executive, said: "We have had hundreds of contacts with investors, investment banks in the last couple of weeks and we have real confidence this initial public offering will be done within the range.

"One could always hope for better markets but you never know when they will arrive."

He denied that falling markets could force the Edinburgh life company to shelve the flotations. If the eventual price that City institutions are prepared to pay falls outside the indicative range Standard will publish a supplementary prospectus.

It plans to raise £1.1 billion of new capital in the share sale. Of that, £800 million is earmarked to boost its capital ratios and finance new business. The remaining £300 million is destined for "general corporate purposes".

Much will depend on the City's views of the newly financed Standard Life's future prospects. Although it made a profit attributable to shareholders of only £30 million last year - a vast improvement on £456 million loss in 2004 - it intends to pay a dividend of 5.4p a share costing £109 million for the remaining months of this year.

That would be about half what the directors say they would have expected to pay if the company had been listed for the whole of this year. At 240p, the mid-point of the new price range, that would make the yield 4.5 per cent.

That price would also be close to its embedded value, a widely-used measure of a life company's worth, including the present value of estimated future profits, below the average for the sector, but close to the valuation of its nearest peer, Friends Provident.

"This price would leave it vulnerable to a bidder if there was an obvious bidder," said Bob Yates, head of European research at the stockbroker Fox-Pitt, Kelton. "I don't know there is an obvious bidder for Standard Life, however. But if one existed then this price range would flush them out."

Resolution, which is known to have made an unsuccessful approach to buy Standard Life before the flotation, has since bought the life business of Abbey National for £3.6 billion.