Act now on mis-sold endowments: new article

Jackie42_2

Hi

It's my first time posting and I'm a tad ....wonder if there's anybody out there that can put me right!!!

There has been all this talk about mis-selling endowment mortgages but I think I've been mis-sold my PEP/ISA mortgage and just wondered if I have any redress??

I've had it since '94 (started as a PEP then went on to ISA) with the Mortgage guy (Independent Broker but arranged with Halifax)...he assured me that my low (to my way of thinking anyway) payments would ensure £48000 at the end of term and the mortgage was for £25000 so nearly double what I would need!!!

On working it out, it would seem at the moment, given how its risen (or not!!) since '94, I'm on target to get about £15000 which is nowhere near to paying off the mortgage.

I'm not at all "au fait" with this financial malarkey but getting paranoid that I may need to find a lot of money in a few years time!

Thanks for sticking with me through this missive and hope that it was fairly simple to understand :rotfl:

Jackie

dunstonh

he assured me that my low (to my way of thinking anyway) payments would ensure £48000 at the end of term and the mortgage was for £25000 so nearly double what I would need!!!

advisers can alter the target growth rate required. If the adviser put a reduced the target growth rate so the intermediate projection rate as £48,000, that is not a bad thing.

On working it out, it would seem at the moment, given how its risen (or not!!) since '94, I'm on target to get about £15000 which is nowhere near to paying off the mortgage.

If it was a 25 year mortgage and the mortgage balance is £25,000, then at 7% p.a. average growth rate, you would need to have been paying around £56pm. The balance should be at least £12,862 at this time to be on track. Any more than £12,862 and you are above target, any less and you are below target.

Who is the ISA provider and what investment funds are you in. Those two bits of information are critical to any decision you need to make.

Jackie42_2

Hi dunstonh and thanks for replying

In answer to your query...looks like i'm way out in all ways!!!! :mad: I have a 25-year mortgage and I was assured that £25 per month should net me £48000!!!

At the moment, my PEP and ISA is with Perpetual, now Invesco Perpetual and the last statement was for approx £4200...doesn't need a genius to figure that I'm going to need a miracle for it to make as much as the financial guy assured me it would, does it?

If I doubled the payments I am currently making on my ISA(that's if I can of course, bit of a numpty where this is concerned ) would I go somewhere near to paying my mortgage at the end of term?

Thanks once again for your knowledge

Jackie

dunstonh

In answer to your query...looks like i'm way out in all ways!!!! :mad: I have a 25-year mortgage and I was assured that £25 per month should net me £48000!!!

Although you can't rule anything out, £25 is half what it needs to be.

At the moment, my PEP and ISA is with Perpetual, now Invesco Perpetual and the last statement was for approx £4200...doesn't need a genius to figure that I'm going to need a miracle for it to make as much as the financial guy assured me it would, does it?

Good fund house with some very good funds. Concept of what has been done is fine but the contribution used is not at all sufficient.

If I doubled the payments I am currently making on my ISA(that's if I can of course, bit of a numpty where this is concerned ) would I go somewhere near to paying my mortgage at the end of term?

You needed to be paying around £56pm from the start. That needs to be closer to £91 now i'm afraid, again using 7%p.a. as target growth rate.

Jackie42_2

Hi again and thanks

I have just emailed Invesco to explain my predicament and will see if they respond....but I have to say that I am smarting just a little because I was assured what the figures would be back in '94!!!!

Jackie

dunstonh

Invesco wont be able to offer any advice. They will allow you to increase the premiums though.

mayb_2

We were missold an endowment mortgage in 1992 and a few years ago used the Which site to make a claim against the company concerned. This was the best thing we could have done as it went through without a hitch and the company paid us compensation without an argument.

The main document you need to look for is the 'Fact Find' completed by the company at the point of sale. If you request a copy of this the company has to supply it. This should show whether you were advised of the risks involved and whether you had any financial experience through other investments at the time you purchased the endowment. If they cannot supply you with this then it should support a claim that you did not receive proper advice at the time and did not understand what you were purchasing.

If you check out the FSA's website they state in one of their reports that a large amount of Endowments were sold in the early 1990s. I think most of us were unaware of exactly what that meant back then - we were told it was the only type of mortgage we could have if we wanted to fix the interest rate at a lower rate than applied at the time - I have a feeling that would have been 15% - and we were not offered any other type of mortgage.

Even if you get compensation that doesn't really cover the losses you have made and I cannot bring myself to feel sorry for the financial companies or the financial advisors. Our mortgage company advised us that if we increased the monthly payments we would not have a problem, only to tell us a year or so later that our mortgage was shortfalling even more. We don't owe these people a living and they take their commission even when the product is failing us.

We used the compensation to pay off some of the mortgage - the only person who suffers if you don't do that is yourself - you are the one who owes the money after all.

dunstonh

If you request a copy of this the company has to supply it.

No it doesnt.

Even if you get compensation that doesn't really cover the losses you have made and I cannot bring myself to feel sorry for the financial companies or the financial advisors.

Thats harsh. I pay out around £6500 a year to cover mis-sales. Yet I or my company have not had one mis-sold endowment or any other mis-sale for that matter. How would you like to pay out that much a year because a neighbour had a problem that had nothing to do with you?

mayb_2

dunstonh wrote:

No it doesnt.

This was the situation that applied when we were making our claim through Which so perhaps you could check that with them. Why would a company not feel able to supply that information - if it contains no falsifications they should not have anything to worry about. Reading some of the posts made here it would appear that is not always the case.

We are involved in a claim against a financial company and the copy of the fact find supplied by them was very revealing and useful.

dunstonh wrote:

Thats harsh. I pay out around £6500 a year to cover mis-sales. Yet I or my company have not had one mis-sold endowment or any other mis-sale for that matter. How would you like to pay out that much a year because a neighbour had a problem that had nothing to do with you?

Many businesses have to pay out public liability insurance whether they ever need to claim against it or not - it is a legal requirement. May I resepectfully sugest that your mis-sale cover is on the same lines for your business? Financial advisors often advise us to take out insurances for all sorts of risks - do you not feel you should also cover yourself against the possibility that you may need it one day? You and your company obviously have a very good record but not all of you operate the same way and the customer does need to be protected. Many people in these posts have complained that compensation paid to some claimants leaves less in the pot for those still needing to keep their endowments. Surely if companies have to have a separate pot to cover such claims it saves having to take the money from those people. I am new to this - perhaps I am being too simplistic?

ajd3

dunstonh wrote:

Thats a risky assumption to take. You could be with a provider that has no stockmarket investment in their fund. In which case, you are highly unlikely to hit target or come close. Or you could be with a decent provider with decent unit linked funds and come in with a surplus. If you post some details about the plan, we can help post some "opinions" on the policy to help you in your decision.

dunstonh,
Sorry about delay in response but I've been on holiday (bargain 4*HB in Spain - great)
My policy is Standard Life Homeplan and is a Managed Fund. A performance review I've come across in my paperwork dated 31 March 2003 states 'the fund will continue to favour stock markets... such as in the UK, the US and Pacific Basin.' I pay £49.68 each month and the value target is £27,000
I think it's also something to do with unit trusts as I recently got a letter saying I didn't qualify for a windfall when/if SL demutualises as it isn't a with profits policy.
Is there an idiot's guide to finance anywhere (Mortgages & Finance for Dummies?) or am I resigned to never understanding any of this financial stuff?
Thanks again for your help