Please read if you're a Financial Advisor

fatkid_lovescake

Dear friends,

Thanks for looking.
I have an endowment policy taken out in 1989 for 25 years for which there is now a projected shortfall of 10,000 in 2014.
I followed the mse guide and as far as I know I have exhausted all avenues and gone through the FSA and now have received a cheque for 104 pounds from the FSCS.
The reason they have given for this miserly figure is that the firm who mis-sold me the endowment has now gone out of business and there is a 'notional' saving of approximately 2700 pounds since 1989 as I have an interest only mortgage and not a repayment mortgage so the difference between the surrender value and the balance of the shortfall minus the balance had I have taken out a repayment mortgage comes to 104 pounds.

Is this correct?
Can some one please help as I, like most people won't have 10 grand lying around in 6 years' time to pay this off.

Can I do anything about it?
Apologies if I haven't quite explained this correctly.
Thanks

dunstonh

The reason they have given for this miserly figure is that the firm who mis-sold me the endowment has now gone out of business

Thats not the reason the amount is small. That is the reason the FSCS were handling the complaint.

there is a 'notional' saving of approximately 2700 pounds since 1989 as I have an interest only mortgage and not a repayment mortgage so the difference between the surrender value and the balance of the shortfall minus the balance had I have taken out a repayment mortgage comes to 104 pounds.

Is this correct?

That is correct. Endowment mortgages were usually cheaper than repayment mortgages. So, you have been paying less each month. If you complain that you should have been on a repayment mortgage and that complaint is upheld then they put you back in the position you would have been. So, in your case you paid £2700 less than you would have done had you been on a repayment and the difference after that is £104.

I, like most people won't have 10 grand lying around in 6 years' time to pay this off.

Start saving or better still, convert 10k of the mortgage to repayment basis. if you cannot afford the extra monthly payment on that, then you could extend the term of the mortgage by a year or two if the lender are happy to do it.

Can I do anything about it?

You could get the endowment reviewed to see if the 10k shortfall is a reasonable figure or not. It could be worse than that, it could be better. Also, there is the potential that switching the lot to repayment and reducing the amount borrowed by the surrender/sale value may be better.

fatkid_lovescake

Hi mate,

I really do appreciate that, thanks very much for your help.

It does make sense now.

All the best