Endownment Compensation Negotiation

nadeem220

Hello I'd like some help on deciding my next steps. The situation is this - Endowment plan in 1999 - value was £126k. It is underperforming, and thanks to Martin I wrote a letter to the AbbeyLife who sold us the policy.

After filling the forms, Abbey have come back and offered us £8k. That's nice, however I want to know how exactly they hace calculated and should I be holding out for more?? They claim to use a computer program that the FSO would use to calculate. Just wondering if anyone has held out for more then the first offer and if so what the next steps were...

dunstonh

I want to know how exactly they hace calculated and should I be holding out for more??

It should be a calculation which is defined and not one you can haggle on.

They claim to use a computer program that the FSO would use to calculate.

its called mortgage fundamentals and is used by most.

Just wondering if anyone has held out for more then the first offer and if so what the next steps were...

You can ask them to recalculate but as their plans are unit linked and have a daily value (which would have gone up around 5% in the last week or two) you run the risk of the redress payment being reduced due to improved investment return.

Endowment plan in 1999 - value was £126k. It is underperforming,

Any plan started in 1999 would be underperforming on current projection rates and in the short term. That doesnt mean that it is bad or that there will be a shortfall. Its just a limitation of the projection process that assumes a steady return rather than the zig zags that you get. (for example, no 20% drop has been factored in as has recently occured nor the fact that the units being bought are now 20% cheaper and these will be the ones that make the most in the long run).

nadeem220

Thanks for the reply!!

EdInvestor

The compo is worked out according to a set formula and isn't really negotiable.