Act now on mis-sold endowments: new article

theglobe_2

My question, does the interests rate rising, mean your surrender value is higher, and therefore you get less or no compensation.


The Case

Barclays was written to after a shortfall letter, even though when the person took out the policy they were told they would likely recieve the money to pay of the mortgage plus the equivilent cash sum,

the person is ill with mental health problems,

they explained this, phoned disability line

barclays was very nice offered to do all forms, letter came back policy not mis sold

But info on form incorrect

I went to FSA

this took months n months

since then shortfalls no longer predicted

Barlays agree to settle with FSA involved

but take further time to sort out, shortfall gets less

then recieve letter, calculation on day this letter written not on first complaint

no shortfall

after cost of life insurance

person, has been retired due to ill health, so things really a struggle

will convert to repayment.

was wondering if I should raise the time issue

dunstonh

My question, does the interests rate rising, mean your surrender value is higher, and therefore you get less or no compensation.

No. Endowments use investment funds which typically invest in areas not related directly to interest rates. e.g. stockmarket. There are some investment areas with a indirect link but it doesnt work that way.

The only benefit of rising interest rates is that the monthly cost of your mortage on endowment basis will increasingly become less than a repayment mortgage (if you had been on one of those).

was wondering if I should raise the time issue

Time has nothing to do with it. At this point there is no financial loss and the person is better off having the endowment compared to repayment. As they are financially better off, they are not due any redress.

theglobe_2

thank you for taking the time to reply so quickly

big help
thank you
this is such a minefield
and I really struggle with it

but trying to help

any advice much appreciated

there are two mortgages one for £21000 the original one
and one for £8000 central heating, double glazing etc

And I also have to advise on whether to switch to a repayment

they were taken out pre oct 1995, and the son and father now pay the mortgage together

all though it's in the wife/ step mothers and husbands name, they are all still great friends, but she only contributed to the mortgage for a year

ideally it would be good to somehow get the sons name to protect him on the mortgage as he has been paying 50%

and if anything happened to both of the named people the son could find other children the spouse from another ex marriage have a claim I guess

the father and son are disabled, and on incapacity benefit, and the mortgage is paid partly by income support and then the rest 50 % each for the last 12 years.

I am not sure how surrendering the policy, would affect the income support

The wife has a bad health condition, and can not contribute, as she can not work, she has been very ill, and is having operations to stay alive.

They are all very close, love each other dearly as friends.

But nobody has an idea of financial things.

they blindly think Barclays is the knight on the white horse and just say whatever they say, they don't understand any of it, and just think the man from barclays told them they will have the mortgage paid of and double again and that is what will happen in the end.

It's such a nightmare

any advice you can offer much appreciated.


other relevant info

Date loan taken out or housing costs started
People who took out their mortgage after 2 October 1995 will receive no help with interest payments for the first 39 weeks following their claim. Clients who fall into one of these categories will get help sooner:
people who took out their current mortgage on or before 2 October 1995
people whose current mortgage replaces a previous mortgage on the same property with the same lender which was arranged on or before 2 October 1995
single parents whose partner has died or abandoned them
carers looking after people claiming Attendance Allowance or Disability Living Allowance care component at the highest or middle rate certain benefits
people with pre-existing medical conditions or HIV that prevented them from taking out mortgage protection insurance or receiving payment under a protection scheme
prisoners on remand awaiting trial or sentencing.
Anyone falling into these categories qualify under the ‘old’ Income Support rules. This means they get no help for the first eight weeks, have 50% of eligible interest payments paid between weeks nine and 18 (inclusive) and then have 100% of their mortgage interest payments met after that.
Help with housing costs
People over 60 can claim for help with mortgage payments through Pension Credit. People under 60 can claim for help through Income Support or Jobseeker’s Allowance (income-based). Loans taken out to pay for repairs or essential improvements also qualify – for a list of what counts see qualifying housing-related loans.

You should enter the outstanding balance on your mortgage or housing-related loan (it does not matter whether you have a repayment or interest-only mortgage). Note that assistance only covers interest payments and no support is available for capital repayments.

If you have an endowment mortgage you can not claim for help with premium payments on an endowment policy. Interest payments are calculated by applying a standard interest rate to the outstanding balance on the client’s mortgage or housing-related loan. The standard interest rate is based on the Bank of England Base Rate plus 1.58%.
There is an upper limit of £100,000 to the outstanding loan that may be claimed for. This limit does not apply if the loan was taken out and used, in full or part, to adapt a home: or if the client moved:
to meet the special needs of a disabled person; or
to provide separate sleeping accommodation for children of different sexes who are aged 10 or over.
The amount claimed for housing costs can be reduced if other people (excluding their partner) normally live with the client. For more information see deductions for non-dependants.

Payments through Income Support or Jobseeker’s Allowance (income-based) are made directly to the mortgage lender. To qualify for help clients need to have taken out their mortgage or loan before they started claiming benefits. Clients who increase their mortgage after they start claiming will only be helped with the interest payments on the original amount they borrowed.

House shared with non-dependants?
If you share your home with someone who is not your partner or a dependant your entitlement can be reduced through rules on non-dependant deductions.
A non-dependant is a person who:
resides with the claimant, and
is over 18, and
is not a partner, or dependant child of the claimant and/or their partner, and
is not liable for paying the rent or pays rent to you as a sub-tenant.
Non-dependants are often people like grown-up sons or daughters and elderly relatives.

If you or your partner are blind or claiming Disability Living Allowance care component or Attendance Allowance then non-dependant deductions do not apply. The calculator automatically recognises cases where this applies.

In Pension Credit only people claiming for help with housing costs, because they have an outstanding mortgage, are affected by rules on non-dependant deductions.

The rate of non-dependant deduction depends on how much the non-dependant earns. There is no deduction for some groups, depending on the benefit in question.
In Housing Benefit no deductions will be made if:
the non-dependant is in receipt of Pension Credit (savings credit cases as well as guarantee credit)
the non-dependant is in receipt of a training allowance or a YTS scheme
the non-dependant has been a patient in hospital for 52 weeks or more
the non-dependant is a full-time student (but deductions may be made during the summer vacation if the student does any paid work in this period)
the non-dependant is a prisoner
In Council Tax Benefit no deductions will be made if:
the non-dependant is in receipt of Pension Credit (savings credit cases as well as guarantee credit)
the non-dependant is severely mentally impaired
the non-dependant is over 18 but Child Benefit is still payable for them
the non-dependant is a student nurse or apprentice or on Youth Training
the non-dependant has been a patient in hospital for 52 weeks or more
the non-dependant is living in a residential care or nursing home
the non-dependant is a care worker
or the non-dependant is a full-time student (even if they work full-time in the summer vacation)
the non-dependant is a prisoner
If you share your home with someone who is not your partner they may also be entitled to second adult rebate (alternative Council Tax Benefit).
In Income Support/Jobseeker’s Allowance (income-based) no deductions will be made if:
the non-dependant is in receipt of Pension Credit (savings credit cases as well as guarantee credit)
aged 16-17 and receiving IS or JSA (income based)
aged 18-24 and receiving IS or JSA (income based)
receiving a work-based learning for young people allowance

Help with housing costs
People over 60 can claim for help with mortgage payments through Pension Credit. People under 60 can claim for help through Income Support or Jobseeker’s Allowance (income-based). Loans taken out to pay for repairs or essential improvements also qualify – for a list of what counts see qualifying housing-related loans.

You should enter the outstanding balance on your mortgage or housing-related loan (it does not matter whether you have a repayment or interest-only mortgage). Note that assistance only covers interest payments and no support is available for capital repayments.

If you have an endowment mortgage you can not claim for help with premium payments on an endowment policy. Interest payments are calculated by applying a standard interest rate to the outstanding balance on the client’s mortgage or housing-related loan. The standard interest rate is based on the Bank of England Base Rate plus 1.58%.
There is an upper limit of £100,000 to the outstanding loan that may be claimed for. This limit does not apply if the loan was taken out and used, in full or part, to adapt a home: or if the client moved:
to meet the special needs of a disabled person; or
to provide separate sleeping accommodation for children of different sexes who are aged 10 or over.
The amount claimed for housing costs can be reduced if other people (excluding their partner) normally live with the client. For more information see deductions for non-dependants.

Payments through Income Support or Jobseeker’s Allowance (income-based) are made directly to the mortgage lender. To qualify for help clients need to have taken out their mortgage or loan before they started claiming benefits. Clients who increase their mortgage after they start claiming will only be helped with the interest payments on the original amount they borrow

You may be able to get help to meet the costs of a mortgage or a loan taken out to pay for repairs or essential improvements. To work out your entitlement we need to know the size of your outstanding loan. This is used to work out how much interest you pay - no help is available to meet the cost of repaying capital or endowment premiums.

You may also qualify for help with other costs associated with housing, such as service charges and ground rent. Please enter separately the amount you pay

dunstonh wrote: »

No. Endowments use investment funds which typically invest in areas not related directly to interest rates. e.g. stockmarket. There are some investment areas with a indirect link but it doesnt work that way.

The only benefit of rising interest rates is that the monthly cost of your mortage on endowment basis will increasingly become less than a repayment mortgage (if you had been on one of those).



Time has nothing to do with it. At this point there is no financial loss and the person is better off having the endowment compared to repayment. As they are financially better off, they are not due any redress.

cathyk

In 1992 I surrendered an endowment and took a new one on the advice of an IFA. He said the old policy was with a poor performing company and recommended General Accident. I lodged a mis-selling complaint but his records (not surprisingly) fail to mention that he advised me to surrender one policy to take a new one through him. Unfortunately I can't for the life of me remember the name of the old policy company and I need proof from them that I indeed had a policy and surrendered it shortly after my meeting the IFA. Can anyone out there think of a way I can trace this old policy? Short of writing to every endowment providing assurance co in the UK I can't think of what to do next. Help!

Art_2

cathyk wrote: »

In 1992 I surrendered an endowment and took a new one on the advice of an IFA. He said the old policy was with a poor performing company and recommended General Accident. I lodged a mis-selling complaint but his records (not surprisingly) fail to mention that he advised me to surrender one policy to take a new one through him. Unfortunately I can't for the life of me remember the name of the old policy company and I need proof from them that I indeed had a policy and surrendered it shortly after my meeting the IFA. Can anyone out there think of a way I can trace this old policy? Short of writing to every endowment providing assurance co in the UK I can't think of what to do next. Help!

How did you pay your premiums? If you paid through your bank then your statements will tell you the name of the company.

Regards,
Art.

mayb_2

If you didn't pay through your Bank then may be you can remember how you bought the policy in the first place - was it on the doorstep, did you go to someone for advice for instance. How did you pay? dunstonh can probably give you the names of those companies selling 'on the doorstep' I should think. The CIS and the Pudential were two companies with visiting reps. Best of luck - rattle those brain cells - it is too important to forget! Trouble is the misselling bit requires you to have no idea about the need for your policy to 'perform' Did you get promised a better return because it was a better company or a better return because it was invested in a better place for instance? You can't claim misselling based on the lack of performance of your policy. Or are you just complaining that you were advised to change providers - this aparently is known as churning - when someone persuades you to finish a policy in order that they can sell you something else and it was doing the same job. Or perhaps it is a bit of both. Good luck with the search.

rambo65

Since nobody has replied I thought I would try again -

Has anybody had any dealings with winterther life? Has anybody won any cases for endowments with them?

mayb_2

Rambo 65 why don't you explain your problem with winterther life and see if anyone can help you. The missale is all to do with what happened to you when you bought your policy and even if the company is not particularly known to anyone you might still get some advice on here.

Crazy_Saver

Hello mayb.

Where have you been lately?

Thought you were on holiday.

Crazy Saver

mayb_2

Hi Crazy Saver - I have been looking about for you too. I have been around but not found anything to get really stirred up about lately. How about you -did you get any good advice about your endowment situation. Anything new on that? I am crossing everything for a win on the premium bonds in June myself.