Act now on mis-sold endowments: new article

fatcattaff

I actually worked for Norwich Union in the 90's, not for the mortgage section, but for their direct marketing department (yes, it was the devil's own practise, but I needed a job!). Part of my terms and conditions stated that I could have a mortgage allowance during my employment, but I had to take out an endowment mortgage with my employer at one of their approved lenders.

My employers told me that endowment policies were great and would pay off my mortgage and give me money at the end. I therefore said I didn't need financial advice...I'd had plenty from my employer, which ultimately negated any claim I may have had for a mis-sold endowment.

I was made redundant by NU 4 years later and lost my mortgage subsidy, which was all fine. Now, of course, I have 9 years left on my mortgage and I've got to somehow make up the shortfall we'll experience fom the endowment, around £30k in the worst case scenario.

Instead of doing this, we've started to pay off our mortgage, hence our appearance on the boards here.

I think that blaming people for opportunism and stupidity regarding endowments is bang out of order. As stated earlier, many of us buying our houses were the first ones to do so in our families. We knew nothing about finance, but trusted people who supposedly did. Hell, I worked for an insurance company and I knew nothing other than what I was told. I guess we are the last of the 'trusting' breed that existed in the 80's/90's or perhaps we were the naieve ones.

It should be a lesson for our kids to learn...don't trust anyone but independent financial advisers. Borrow as little as you can and always, always doubt gooses that lay golden eggs...he's much more likely to be a turkey.

mayb_2

What you said in fact dunstonh was that people with low IQs should not be allowed to buy houses. Not sure how that relates to me being on about anything.

No doubt FA's are the best people to be the judge of whether or not our IQs are of sufficient standards to entitle us to have a home of our own??

turbobob

Detest_Lloyds wrote: »

Thanks again TurboBob. I will now let you know the dispute has been through the FOS. After 3 years where an adjudicator firstly agreed with our arguement then disagreed then agreed again and then after the Bank refused to agree with the adjudicator's decision it went to final decision by an Ombudsman who disagreed with us! What a shambles. It's all very odd as I was under the impression that adjudicators were guided by Ombudsmen during cases?

Right, I see. In that case then you've exhausted the complaint process. You can't appeal against a final decision. You could possibly take legal action, but I don't know anything about that. I would imagine its not something to be taken lightly.

When you say "A partial refund of premiums (with simple interest at 8%) in respect of the sum assured mis-match" can I just clarify what you mean? £160.60/month over 25 years was to cover £105,000 but the sum assured should have been £87,500? So lets say to cover £87,500 should have been £130.60/month the refund should be £360/year for 17 years (approx) + 8% on top of the total? How can I determine what the actual month payment amount should have been to cover £87,500? Sorry but just clarify what "SV" is please.

SV = surrender value

A simple example of the pro-rated refund. Say the endowment target was £100,000 and you were paying a £200 p/m endowment premium. The mortgage was only for £75,000 (75% of the endowment target amount). In this case, the pro-rata refund would be £50 p/m (25% of the premium). The remainder of the premium (£150 p/m) would be used in the RU89 calculation.

Net interest is payable on each partial premium at 8% simple per year (15% before 01/04/1993) to the calculation date. "Simple" means it's not compounded.

Just a further note on this. If I recall correctly, you would not do this partial refund where, despite the larger sum assured, the total outgoings with the endowment mortgage with the whole endowment premium (£200 p/m in my example above) were still less than the equivalent repayment mortgage. You would need to look at the "Mortgage Fundamentals" calculation to determine this, which the bank will be able to send you.

don473

Hi all, first time poster here. I created the Mortgage Endowment petition below in an attempt to get the Govt to force the banks to make good the shortfall in these policies. Please sign it and pass it around as many people as possible, if we don't ask we don't get.

http://petitions.number10.gov.uk/Bankstorepayus/

dunstonh

don473 wrote: »

Hi all, first time poster here. I created the Mortgage Endowment petition below in an attempt to get the Govt to force the banks to make good the shortfall in these policies. Please sign it and pass it around as many people as possible, if we don't ask we don't get.

http://petitions.number10.gov.uk/Bankstorepayus/

Waste of time and lack of understanding, as pointed out on your duplicate posts. The banks didnt sell the majority of endowments. The old home service companies did. Why should the banks pay up when they are not responsible?

mayb_2

It has not been possible to make the banks pay up when they were responsible - recent actions have meant that if the banks pay out so does the tax payer who actually partially own them now. They are all still paying themselves far too much money; lets hope we follow in the footsteps of Obhama and put a stop to that at least while they owe us.

Nice idea don473 but I think it should be aimed a bit more broadly and cover all finance companies myself. I may sign it though - I will certainly have a look at it.

feisty1

don473 wrote: »

Hi all, first time poster here. I created the Mortgage Endowment petition below in an attempt to get the Govt to force the banks to make good the shortfall in these policies. Please sign it and pass it around as many people as possible, if we don't ask we don't get.

http://petitions.number10.gov.uk/Bankstorepayus/

I totally agree with dunstonh's comments, surely if you want to petition you would have done some research and presented yr facts correctly. This just shows a distinct lack of understanding, you'd be as well standing on my street corner with a placard.........To put yr name to this is embarrassing...........

bmh_3

Hi,
I don't know whether anyone here can help - we took out a second endowment policy some years ago as we were increasing our mortgage. Neither of us can remember whether we did it though an independent financial adviser or not, all we can remember is that someone came out to the house. The policy was with Commercial Union, but at some point it was taken over by Norwich Union.
I've just tried filling out the complaint generator form to create a letter of complaint but I don't know who to put down as having sold the policy and it's also complicated by Norwich Union having taken it over. I don't want to give up on it, but really don't know where to go from here. Could anyone with more knowledge about these things advise please.
Thanks
Brenda

mayb_2

I would be interested in the answer to that one bmh - how does the three year rule work if the policy no longer belongs to you for instance. No letters will have been sent to you about the possible shortfall. Does that mean that if you can claim there is not a limit on when you do it?

grubby_watcher

I have never used the forum before, so please do forgive me if i go wrong!!

When i moved in with my hubby, some years ago, he already had an endowment mortgage going. When we moved to our second house and increased the mortgage, we took out an interest only mortgage for the difference of the borrowing, but also was adviced to transfer £10,000 onto repayment motgage, as we was adviced that the endowment wasn't going to make the £40,000 that it had to make. When the hubby took the endowment out 18 years ago, he was told that the endowment should make in excess of £100,000, but now we are really worried that it's not even going to make half of the £30,000 that it needs to. I have mentioned the compensation route to my hubby in the past, but he feels like it is too much of a hassle to look into, as he's not even sure he qualifies. Can anyone help me in anyway, as anything i can possibly get to put towards my endowment/mortgage would be a great help (if we would qualify) and it would make things a little easier to swallow in 7 yrs time when the policy matures.
All i want is to finish the mortgage in 7yrs and not have to look at taking another loan/mortgage out for another number of yrs, just to cover what ever it's not going to make (if that makes sense)
I would be greatful for any help or advice
Many thanks xxx:o