My endowment - be honest, am I totally stuffed?

fridayschild_2

dunstonh wrote: »

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.

Unfair though -we were 'misinformed' as much as anybody, just a year earlier!

Ok, I have the surrender value of £26,007.45 as at todays date.

The maturity forecast they are going to send me within 7-10 working days.

The end date for the policy is September 2012

The Mortgate interest is currently 7.09% gross.

Thanks again for all your help, it is appreciated.

sdooley

dunstonh wrote: »

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.

I don't agree. What the OP has described (although there may be two sides to the story) would be fraudulent or negligent misrepresentation under the 1967 Misrepresentation Act. The difficulty is that for contracts before regulation, you can't get recompense by complaining to the regulator and the provider is under no regulatory pressure to settle your complaint. You can only go to the courts.

dunstonh

I don't agree. What the OP has described (although there may be two sides to the story) would be fraudulent or negligent misrepresentation under the 1967 Misrepresentation Act.

Two problems there:
1 - Prove it. Thats the problem. What evidence would there be to prove such misrepresentation took place.
2 - The firm doesnt exist any more. So, who are you going to take to court?

poppy10_2

fridayschild wrote: »

The Mortgate interest is currently 7.09% gross.

First off, that's a very high rate, even in today's climate. With such a low LTV, you can surely do better.

Secondly, even at 7.09%, your monthly interest payments should only be £355, not £440.

Kikimay

Hi fridays child, I have the same dilema, our endowment is now with Phoenix and have just received our annual policy statement which shows a shortfall of about £4000 for us. Ours matures May 2011. Do you read it as we will get a final bonus at maturity? Very confusing and sickening when you think we were also promised enough to pay off the mortgage and also a good lump sum when we were sold it!!(1986)

EdInvestor

If you surrender the endowment now (which is what you should definitely do), and use the 26k to immediately reduce the mortgage, plus increase the monthly mortgage payment by the 107 you pay on the now redundant endowment, by maturity your total return will be 40,130, which is 10k more than you will get if you keep the endowment.

So that's definietly the way to go.

Now to pay off the additional 20k owed on the mortgage, you will need to either increase the mortgage payment by more than the 107 pounds, so that you are overpaying the capital more quickly and/or, extend the number of years the mortgage will run before it matures.Get your mortgage advisor at the bank to do the calculations for you.

Your mortgage interest rate is not too bad considering the state of the market at the moment, there is no point in moving .The advisor might suggest you switch to a repayment mortgage, but if so watch carefully for high fees and charges, you may end up worse off than if you just threw money at your existing loan as it becomes available.

If you need to replace the insurance, do this before surrendering the policy.

fridayschild_2

Hi, thanks again to everyone who replied. Sorry I haven't been around, I've been unwell.

I have had the surrender letter from the Phoenix today. It says that the policy is assigned to the Leamington Building Society, (this was taken over by the B&B many years ago) and that I would have to get them to send a letter 'confirming that they have no further interest in the policy'.

Is that possible? Surely the building society won't relinquish their interest if the morgage is still running?

Kikimay I'm sorry you are in the same position as us. I don't quite know what to make of the whole final bonus question. I have applied for a maturity forecast but haven't got it yet. They did say that it would come with the surrender papers but its probably another department so will come in another envelope (gawd help the rain forest!)

arealbasketcase

I am in no way a financial advisor so this is only my opinion:

The endowment you are paying is effectively providing you with £60k joint life-cover, it is expensive insurance but at least at the end of it you will (just about) get back what you have put into it!

Your mortgage is nothing but an interest black hole, and you are paying fairly highly for the privelege.

If you cash in the endowment now, with the surrender value they have quoted you know exactly how much you are going to get. The terminal bonus is not guaranteed and can change at any time, they only thing they can't take away are the accrued bonus'.

By cashing in now and remortgaging (assuming you put the lump sum towards the repayment of the existing mortgage) you would only need a mortgage for @ £30k which isn't huge and you could maybe get it over ten years and at a respectable interest rate too.

I think it is a case of cutting your losses.

Martin has some wonderful guides about getting "free" mortgage advice, I think you really do need to find a truly independant financial adviser to give you some proper advice, the sooner the better.

Best of luck.

Rabiddog_2

I'm another ALBa/phoenix/Resolution Victim. Strangely tho .. one of my policies is on track to pay off the sum assured. One reason you may have overlooked these policys is that they appear to have had a policy of never communicating with the policyholders. I certainly do not remember getting any letters in the first ten (and possibly longer) years of the policys. Just scraped inside the mis-selling cutoff date tho, so got some comeback there

Ho-Hum ..crumb of Hope? If your husband goes canoeing off the coast, :eek: possibly all your problems will be solved

fridayschild_2

Thanks again to all who answered. I cannot believe the amount of effort you have gone into calculating figures etc. for a complete stranger!:A

I have taken all your ideas 'on board' and now have a much clearer idea of how to proceed. I was totally in a fog about all this and you have helped me see the light at the end of the tunnel (I just hope its not a train )


THANK YOU!