Act now on mis-sold endowments: new article

mayb_2

I not what you have said about withdrawing a fund dunstonh and wonder if that is possible to do without informing all of those people who have money in the fund concerned. Once no more money can be added, the fund begins to suffer surely as money will be withdrawn as contributers have to be paid out at some point - so an ever decreasing fund?

dunstonh

Once no more money can be added, the fund begins to suffer surely as money will be withdrawn as contributers have to be paid out at some point - so an ever decreasing fund?

Not on most unit linked funds. Indeed, smaller funds can actually be more nimble and reactive to conditions which help their performance. A fund can become too large and end up being like an oil tanker trying to do a three point turn in a canal.

nicky92

Please can anyone help.. I recently wrote to leagal and General about missold endowment policies and they have replied saying that we were not misold because at the time we were told that it may not pay all the mortgage but we were misold because of our circumstances at the time. It says we would have been better off on a repayment mortgage so they have offered us all the money back that we have paid in over the last 12 years plus extra to put us in a position that we would have been in had we taken out a repayment mortgage at the start. My question is do i take all the money and revert to a repayment mortgage or just take the difference and leave the policies running...please help as not sure what to do does anyone think that as I have another 13yrs to go it might pick up and cover my mortgage after all?

dunstonh

they have replied saying that we were not misold because at the time we were told that it may not pay all the mortgage but we were misold because of our circumstances at the time.

It seems that they rejected your complaint as you worded it. However,they are obliged to review the case file for suitability in other areas and have found that they are not up to scratch and have decided to find in your favour.

so they have offered us all the money back that we have paid in over the last 12 years plus extra to put us in a position that we would have been in had we taken out a repayment mortgage at the start.

It is normal to put you in the position you would have been had you gone with a repayment mortgage. So far so good.

My question is do i take all the money and revert to a repayment mortgage or just take the difference and leave the policies running...

If you complained about having an endowment then morally you should now switch to repayment mortgage.

treliac

dunstonh wrote: »

If you complained about having an endowment then morally you should now switch to repayment mortgage.

I agree with you here dunstonh. That the question is asked shows a gap in understanding.

nicky92

Thanks for your prompt replies..the main reason we complained in the first place was because we were told if we paid an extra £10 per month we would be able to pay our mortage off in 17yrs instead of 25 and so that is what we have been doing but now it still says after 25yrs there will not be enough and That is with us paying this extra £10.....but thanks for your advice i will look at switching to a repayment

treliac

nicky92 wrote: »

Thanks for your prompt replies..the main reason we complained in the first place was because we were told if we paid an extra £10 per month we would be able to pay our mortage off in 17yrs instead of 25 and so that is what we have been doing but now it still says after 25yrs there will not be enough and That is with us paying this extra £10.....but thanks for your advice i will look at switching to a repayment

I'm pleased that your complaint was unheld and the redress paid. Those of us affected, and I'm still waiting for my own case to be concluded, were certainly spun a lot of untruths either direct lies or indirectly by omission.

It's definitely best, in my opinion, not to leave anything to chance. Get your mortgage onto repayments after reducing it as far as you are now able; you'll make a good saving in interest otherwise payable over the rest of the term, and you'll achieve some peace of mind for the future.

Good luck.

Igol

I got my endowment back in 1998 for £17000 after being shown the 'industry standard rate' at the time, this obviously implied that I couldnt really loose. 1999 the FSA change the rate and so now the mortage probably wont be paid.

So I did the sensible stuff swapped to a repayment mortgage when Midland/HSBC eventually got around to telling me. I launched a claim for mis-selling with HSBC which they knocked back on the grounds that I was told that the endowment could underperform slightly at the time based on the 1998 rates.

My gripe is that the banks knew in 1998 that the example rates they were using in their literature were essentially wrong and that the endowment problem was about to occur and yet I was still sold one. So can I and is there any point in taking the claim further?

dunstonh

I got my endowment back in 1998 for £17000 after being shown the 'industry standard rate' at the time, this obviously implied that I couldnt really loose. 1999 the FSA change the rate and so now the mortage probably wont be paid.

The rate used on illustrations has absolutely no impact on the performance of the investments within the endowment. I was using 4.4% as a target growth rate back in 1995. 4.4% never showed on any illustration as the defaults had to be shown. The actual returns wont match 4.4% or 4,6 & 8%.

I launched a claim for mis-selling with HSBC which they knocked back on the grounds that I was told that the endowment could underperform slightly at the time based on the 1998 rates.

Which is probably quite fair as the lower projection in 1998 would have shown a shortfall position.

My gripe is that the banks knew in 1998 that the example rates they were using in their literature were essentially wrong and that the endowment problem was about to occur and yet I was still sold one. So can I and is there any point in taking the claim further?

First point there is that the FSA sets the rates to be used. Not the provider. Second point I covered above is that the illustration rates are just examples, not guarantees. I have a number illustrated at 7% that are turning in double digit returns average since commmencement. However, the projections show shortfalls at 4 & 6% as you would expect. Yet the endowments are above target.

If you start using the content of the illustration as grounds for complaint then you obviously read the risk warnings on the illustration as well. These are normally on page and two.

oldrocks

is it too late to put in a claim if we have paid off our mortgage but are still paying off the endowment til 2011?