Act now on mis-sold endowments: new article

dunstonh

1999 and endowments were really on their last legs and the writing was on the wall.

The upside is that the Pru are good, you basically didnt start really investing until after the crash and the potential for returns is very good. Also by 1999, the required growth rates tended to be 6% or lower rather than the 7% or higher seen earlier in the 90s. That all means that your endowment has good potential to hit target and provide surplus.

In 1999, you would expect the quality of the client file documentation to at least show comparative costs etc. However, the onus is still on the advisor to prove it. Having recently seen another firms documentation on cases they do now, it really surprises me how stupid some of these firms and individuals still are.

sunshinesadly

DOTW / Dunstonh - thanks for your postings!!

I get the idea that at least my endowment isn't a complete lame duck. I've long had the idea that bit by bit, when I could afford it, I would eek the endowment out of my mortgage equation (current mortgage is part endowment/part repayment) until I had just a repayment mortgage with an endowment policy just like an investment/savings thing. So that's cheered me up somewhat!!

I see DOTW that you feel I should go for mis-selling - would this be on the grounds of over-optimistic selling or being sold endow+life assurance as single person with no dependents and with high adversity to risk?

defender_of_the_weak

Single with no need for life cover and not willing to take a risk with investments. Expect the broker to dig in and chuck anything and everything at your case. Best of luck

dirtbag_2

A couple of years ago I just went with " I do not like any risk" and got a small payment. Now endowment is in the green , back on track and due to pay a nice surplus again in 2008

sunshinesadly

Thanks for your postings MSE's. I've just checked the Which? website which says the deadlines for complaining are 6 years from buying the endowment (missed that), or 3 years from getting letter about high-risk of shortfall (red letter). I've only had an amber letter - significant risk. Do I still have the right to complain about mis-selling? Thanks for your help everyone.

defender_of_the_weak

Yes, you can still complain if you are within the 3 year rule

bjorn_toby_wilde

Hi folks

I successfully claimed compensation on my 3 endowments (the last two via the ombudsman because Abbey initially refused me compensation). I've used the compensation to pay some of my mortgage off, and I converted it to a repayment a few years ago.

My question is prompted by a calculator i discovered on a mortgage website whilst hunting for information. The calculator shows how much you pay over the life of a mortgage in interest and breaks that down by month (amortisation). It also allows you to input overpayments and lump sum payments to see what effect that has on the length and the interest payments.

I tried the following calculation using one of the endowments.

First i put in a lump sum payment of £7050* for next month (*what I would get if I sold one of the policies). This reduced the length of the mortgage by 1.25 years and saved me £7141 in interest.

Then I put in a lump sum of £12,500 in 2015 to illustrate what would happen if I kept the policy to maturity at the company's (Scottish Widows) maximum growth forecast of 6%. This reduced the term by 1.5 years (attractive) but saved me a lot less interest (£4650)

Obviously, if I sell the policy, I'll need to replace the life cover but, other than that, it looks like a good decision to sell. Also, I'd be able to use some of the monthly premium to overpay the mortgage as well. The mortgage has no penalties for overpayment or lump sum repayment provided I don't pay it off in full (no danger of that!)

The question is - am I missing something really obvious?

squires55

Hi,

Thanks to the information on this website, I've complained to Winterthur and got compensation for a policy sold by Colonial Mutual in 1991. I'm now unsure as to whether I should just take the redress amount or take the redress amount and the surrender value of the policy.

The endowment I took was as follows and was intended to cover a borrowing of £32,000 over 25 years

Sum assured £11,616 increased by bonuses
Guaranteed benefit £32,000
Premium £42.64/month.

From my last bonus notice in Aug 2005 the Total With-Profits Amount was £14516 and there have been no bonuses added for the past three years.

The redress amount offered is £3,926.97 and the redress plus surrender value is £11,095.71

Whilst certain that I will accept either of the above, I'm unsure if surrendering would be the right option.

Since taking the above endowment, I've moved house twice and have an additional endowment which was originally to cover a borrowing of £20,000, though I've changed mortgage providers since and have only £39,000 as the interest only part of the mortgage having converted £13,000 to repayment.

My current mortgage has penalties until Aug 2006 this year, at which point i will in all likelyhood change provider.

All advice and guidance received thankfully.

smp_3

we were sold an endowment by Leeds Building Society - which was shortly after swallowed up by Halifax - the policy was with Standard Life in June 1988
I have found all paperwork, including quoted supplied by at least two other insurance companies recommended by Leeds - and went with Standard life, their recommendation. We are short now £3,200 - our endowment ends in June this year - we have had letters first in two years ago and I opened an ISA with another building society just in case. Do we have a case??

clanger1

might be a silly question, but we keep getting statements for our endowment saying it is on track - should I believe them, is there any way I can still request a review with a hope of anything?