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Endowment matures after mortgage finishes
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# 1
Supaquake
Old 20-09-2006, 1:59 PM
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Default Endowment matures after mortgage finishes

I have been misold my endowment, however more worrying is the fact that the endowment is not due to mature until 3 years after the mortgage is finished. I have been offered compensation to cover any shortfall but I am worried about this 3 year gap !! I have contacted the endowment provider and they have told me to seek financial help. This gap was only discovered whilst complaining about my endowment policy. Has anybody got any ideas as to my next step ?
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# 2
dunstonh
Old 20-09-2006, 2:10 PM
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Is this the same mortgage provider you were with when you started the endowment?

if yes, then it should be built into the complaint. Although you will probably find no extra redress is payable as you have underpaid all these years. If no, then its probable the error occured when you changed mortgages.

Your best bet is to pay the redress and the surrender value of the endowment into the mortgage and switch to repayment mortgage. The monthly cost will almost certainly be more but thats because in most cases endowment mortgages were cheaper than repayment. You can get your mortgage provider to confirm costs before you take any action.
I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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# 3
Supaquake
Old 20-09-2006, 3:55 PM
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Thanks for the reply Dunstonh, the original repayment mortgage was taken out with a local building society, the endowment was taken through the Pru. However we fell behind with the original endowment and were advised to take out another at a higher premium to make sure that the endowment matured at the same time as the mortgage finished. I hope this is of help, the pru seem to think that they have covered all angles and are satisfied with their investigation.
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# 4
vinno65
Old 20-09-2006, 6:25 PM
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Why was the endowment set to run 3 years after the mortgage should be repayed please explain further.
I was in a similar situation and contrary to what Dunston says extra redress may be payable.If it was a mistake on your lenders part then redress should be calculated using the shorter. The notional savings you have made by paying slightly less in premiums every month should also be swallowed by the company. You should be put back into the position you would have been in had the miss-sale not taken place.
regards Vinno
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# 5
Supaquake
Old 20-09-2006, 8:34 PM
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Why the endowment is to mature after the mortgage is a mystery, we thught when we took the second policy out that it would mature at the same time as the mortgage ended.
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# 6
dunstonh
Old 20-09-2006, 10:03 PM
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Have you remortgaged over the years between providers? That is often when errors like this occur.
I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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