My endowment - be honest, am I totally stuffed?

fridayschild_2

Hi all, I am writing to you in the depths of despair.

My statement arrived yesterday showing that I will have a shortfall of nearly £30,000 when my mortgage is up in 4 years.

My husband and I were sold the endowment in 1987 so before the aug. 88 cut off by a company that is no longer trading - Rainbow Countrywide.

We were told that we would not only have enough to pay off the mortgage but a 'nice lump sum' left over to pay for a 25th wedding anniversary party!

The endowment itself is now owned by Pheonix (Resolution) but has come to them through various companies including Crusader & Alba.

No, this isn't the first time I have heard of this shortfall and yes, I really should have done something before hand but the fact is I haven't.

We did consult a financial advisor a couple of years ago who thought that we would be 'ok' and nothing to panic about.

I hope that you will find it in your hearts to forgive my stupidity and offer me some crumb of hope or at least let me down gentlly if there truly is no hope.

Thanks for listening anyway.

minimike2

What is the mortgage balance / repayment method?

How old are you both?

What are your incomes?

What is the value of the house?

dunstonh

We did consult a financial advisor a couple of years ago who thought that we would be 'ok' and nothing to panic about.

Only IFAs are authorised to comment and recommend on products. Financial Advisers are limited to their own provider's product range so they couldnt really say anything other than that.

In addition to minimike's questions can you add the following:

what is the current surrender value of the endowment?
what is the monthly cost of the mortgage and the endowment?

lisyloo

My statement arrived yesterday showing that I will have a shortfall of nearly £30,000 when my mortgage is up in 4 years.

Sorry for more questions.

What fund is the endowment invested in?
With profits? unitised funds? if so which ones.

fridayschild_2

Thank you to everyone who has take the time to reply - I'm not sure I know all the answers to your questions or indeed where I would find them but will do my best.

My husband is 49 I am 47. I am unemployed my husband earns something in the region of £25,000 I believe.

The policy is 'with profits'. The house was mortgaged for £60,000 the balance is still £60,000 of which the endowment currently expects to cover £31,730.

We have lived in the house for 20 years and it has never been re-valued but I've just found that the house 2 doors up from me went at £180,000 2 years ago if that's any indication.

The mortgage is £440 and endowment £107 monthly.

I do not know the surrender value of the policy or what it is invested in.

The really sad, and possibly shameful, thing is, its not until I tried to answer your questions that I realise how little I do infact know about these things!

waggys

Doesn't your statement tell you surrender values etc?

fridayschild_2

No, it lists as follows

Basic guaranteed sum assured of £20,880
Plus previous bonuses of £10,850.59
Plus bonus for 2007 £0.00
Total policy benefits £31,730.59

They do say that if I contact them they will give me a 'projected maturity value' but when I tried that once before (admittedly when it was under one of its other guises) all they told me was that if my Husband or I died it would be paid in full!

minimike2

£440 a month for a £60k interest only mortgage :eek:

That would mean you are paying 8.8% Interest rate!

You need to get at least £30k of the mortgage onto repayment - to do this affordably you will need to extend the term, which shouldnt be a problem with your ages.

I cant comment on the endowment as its not my place to - but if it were to stay on, you could remortgage to a part interest only part repayment (30k on each) on a 12 year term and pay roughly the same as what you pay now.

The question is weather its worth keeping the endowment on, which needs to first be established before a definate plan can be put together....dunstonh is best placed to input on that

EdInvestor

We need the following additional info:

Surrender value of the endowment
Maturity date
Maturity forecasts
Interest rate payable on mortgage.

Be persistent until you get the figs.

The likely best bet will be to surrender the endowment (Alba endowments are the worst ones of all), use the lump sum to reduce the mortgage and then overpay the remaining mortgage to maturity using the endowment premiums plus whatever extra is required.

But post the figures and we can see.

Who is the lender?Not the Britannia BS by any chance?

fridayschild_2

Bradford & Bingley

Thanks for all your help, will try pestering the little beggars tomorrow and get back to you with my figures.

I'm assuming that there is no hope of getting anything from the, ahem, 'gentlemen without married parents' re bad selling?

dunstonh

I'm assuming that there is no hope of getting anything from the, ahem, 'gentlemen without married parents' re bad selling?

No. Its pre-regulation. It would be a little like prosecuting smokers who used to smoke in a pub before the law change. The endowment was sold before the rules came in.