Act now on mis-sold endowments: new article

myk_2

myk wrote:

I got a cheque for £2100 from the Halifax yesterday.... :j

I am so glad I finally complained (I had several letters warning me of the shortfall, but always thought "whats the point I'll never get anything").

If it hadnt been for this site and the Which? automatic complaint letter generator, I would have just accepted that I had lost out because of the 'crash'.

I am overjoyed with this result, its like winning the lottery

I will now be getting some new windows with this cash, and getting complaints in for my partners endowment.

Thank you so much MSE, I love you !!!

I have been reading the offer letter and now have a question:

I have been offered £2100.

The endowment was for £21000, and Started in July 1989.

I stopped using it for paying off the mortgage in May 2003.

Their calculation:

They have stated that the initial compensation is the capital reduction that would have occurred if I had used a repayment mortgage, and totals £8000. They added this to a refund of premiums of £900, and took off the surrender value of £6800.

Therefore £8900 - £6800 = £2100.

This is the bit I am unsure about. As I was almost 14 years into the mortgage, I would have expected the capital I would have repaid in that time to be 14/25ths of the loan ie around £11500. I know that the interest on the loan would alter this figure, but don’t know how to work out by how much.

This initial compensation is the most important figure used in calculating my compensation offer.

Can someone please explain in plain English if this offer is fair, or if I have a case for taking it further.

Thanks in advance.
myk

silvercar

As I was almost 14 years into the mortgage, I would have expected the capital I would have repaid in that time to be 14/25ths of the loan ie around £11500.

No, you pay mainly interest in the first few years, gradually decreasing until by the end it is virtually all capital.

myk_2

So it is a fair offer??

SillyBilly_3

Myk

I have a similar one to yours. Endowment for £31000 and surrender value at oct 2003 was £5300 ish. I would have paid off approx £3200 more using a capital repayment mortgage (according to the sharks) with an additional £640 interest to add on (20% deducted off this for HM Tax). Therefore we were offered compensation of £3700 approx. because we changed the mortgage in oct 2003.

Incidentally, the investigation report stated that we were given all the facts (in 1990) by the FA and they illustrated "what maturity value might be achieved at the end of the mortgage term"

I would like to add that we were just starting out, and were green as grass in these matters, and I'm ashamed to say, trusting of the FA. He sold us the endowment by telling us that not only would we pay off the capital borrowed, but we could expect to get up to £30000 extra!! ontop of this.

So, what do we go for? Repayment with no extra, or endowment plus ton of cash?.... well were older and a bit wiser now. It's a pity we didn't have MSE around in those days.

Anyway, I hope the first paragraph gives you some idea of where you stand with your offer.

TOBRUK

Thanks to DUNSTONH who put me on the right road, on 6th March I sent a complaint letter to Barclays life (mortgage sold by woolwich) regarding mis-sold endowment . I received a letter from them and a 13 page questionnaire on 15th March.

The questionnaire asks about my financial circumstances and morgage arrangements both now and when the policy was taken out. It also states that I should send any documents I have in relation to the sale of policy.

I have spent hours trying to fill in this questionnaire - it's hard work! It asks what was my monthly expenses (ie. bills, mortgage, car, food, clothes, leisure etc) when the policy was taken out - I really can't work that out now! Should I leave it blank?

It also asks me about my income at the time and what my income is now. On top of that they want to know if I have/had any other investments such as unit trusts, peps, ISAs etc or any other assets. Why should they know about those?

Another thing, do I need to send anything other than this questionnaire back to them?

Anyway, I have filled in all the questionnaire to the best of my abilities, and will post it tomorrow. However, I am worried that if I have made any mistakes, will I have any problems? I am just worried about all this paperwork!

Dot

How do I stand as I have cashed my policy in before its full terml? In 1992 I took out a £38k mortage and an endowment to cover it plus bonus. In October 2003 I was told that I was not going to get what was promised and so decided to cut my losses and cashed it in - I got £13k.

Art_2

When I took out my endowment mortgage, the policy was projected to pay off my mortgage and leave me a surplus in the region of £30,000.

My current situation is that my endowment will still pay off my mortgage when it matures in 2 years time but the surplus will be in the region of only £6000.

Have I any recourse in these circumstances?

Regards,
Art.

dreamylittledream

Art wrote:

When I took out my endowment mortgage, the policy was projected to pay off my mortgage and leave me a surplus in the region of £30,000.

My current situation is that my endowment will still pay off my mortgage when it matures in 2 years time but the surplus will be in the region of only £6000.

Have I any recourse in these circumstances?

Regards,
Art.

The short answer is no - the endowment will pay off the mortagage at maturity which is what it was intended to do. Redress in endowment claims only applies if you have made a financial loss by using an endowment to repay your mortgage - ie the endowment is worth less you would have repaid at this point an a capital and interest mortgage. There is no compensation for the reduction in surplus...

There is an outside chance that the endowment may have been more expensive then a repayment mortgage and as such you will be entitled to these costs. However given the projected surplus I suspect this would be offset.

You have a potential 6k surplus - this can hardly be described as a bad result.

trotskiy

Contrary to my husbands expectations i.e. 'no chance of claiming & getting ANYTHING' for an endowment taken out in 1996, filled in the forms, sent them off & have just banked a cheque for £2100+. Would have been more but we made the effort to get ourselves out of the mire 18mths ago. Thank you for nagging

dreamylittledream

Dot wrote:

How do I stand as I have cashed my policy in before its full terml? In 1992 I took out a £38k mortage and an endowment to cover it plus bonus. In October 2003 I was told that I was not going to get what was promised and so decided to cut my losses and cashed it in - I got £13k.

Yes you can still claim compensation on a surrendered policy but the calculations will cease at the date the policy was ended.