Act now on mis-sold endowments: new article

fishing_mad

Thank you.

dunstonh

fishing_mad wrote: »

Surely the 'redress' - meaning placing you in " the position you would have been (in) had you gone with a repayment mortgage" -may be inadequate if you have also incurred early repayment penalty charges and other bank charges as a result of taking the advice to switch from repayment to an endowment mortgage.

There is no ERC charged on converting interest only to repayment basis. Most will do it at no cost but a few charge but no more than £150 typically.

If you have incurred an ERC for changing a mortgage then that has nothing to do with the original seller and not their fault. That was a decision you made on something that did not need to happen.

magpiecottage

dunstonh wrote: »

If you have incurred an ERC for changing a mortgage then that has nothing to do with the original seller and not their fault. That was a decision you made on something that did not need to happen.

That said, if you incurred a fee because you chose to convert from endowment to repayment and/or incurred a fee because you used the redress and/or endowment surrender value to reduce your loan then you would be entitled to have that reimbursed as part of your redress.

arcweld

Hi,
I have recently received a statement from the Halifax stating that my ISA/PEP taken out in1999 is now on 'Amber Alert', I have two questions, 1. Is there a case for mis-selling claim & 2. Any just cause for compensation for the shortfall?
Many thanks

dunstonh

arcweld wrote: »

Hi,
I have recently received a statement from the Halifax stating that my ISA/PEP taken out in1999 is now on 'Amber Alert', I have two questions, 1. Is there a case for mis-selling claim & 2. Any just cause for compensation for the shortfall?
Many thanks

You havent given any reasons for mis-sale or compensation. So, on that basis the answer would be no. Shortalls are not reasons for complaint. A potential shortfall is only an indication that currently it is off track based on a certain growth rate.

arcweld

dunstonh wrote: »

You havent given any reasons for mis-sale or compensation. So, on that basis the answer would be no. Shortalls are not reasons for complaint. A potential shortfall is only an indication that currently it is off track based on a certain growth rate.

I was sold the ISA on the understanding it would mature after 20 years in 2019 and pay back just over £16,000, with seven years to go the shares are only worth £6,900. Therefore the chances of reaching the desired amount are negligible.

magpiecottage

arcweld wrote: »

I was sold the ISA on the understanding it would mature after 20 years in 2019 and pay back just over £16,000, with seven years to go the shares are only worth £6,900. Therefore the chances of reaching the desired amount are negligible.

How much do you pay for it and what rate of return was it targetted to achieve?

dunstonh

I was sold the ISA on the understanding it would mature after 20 years in 2019 and pay back just over £16,000, with seven years to go the shares are only worth £6,900. Therefore the chances of reaching the desired amount are negligible.

It is highly unlikely that any documentation exists saying that they would pay out £16k. As it is an ISA (or PEP for a period prior to that) and it is Halifax, we know what sort of documentation would exist. This would include an illustration with three projection rates. One would show a shortfall. The other would likely show the target or thereabouts and another show a surplus.

I disagree that it is neglible it will hit target. An amber alert means it needs to achieve a little above target growth rate it hit target but still within the possible range of the investments. 7% a year growth on £6900 would see £11080 over 7 years. That would leave you £4920 short but you are paying monthly premiums into it. Using a 7% target again, you would need to pay £45.66pa. to hit that target.

How much do you pay each month?

Now some of that will go in life assurance and charges but it gives you a ball park figure. If we lowered the anticipated rate of return down to 5% (to allow say 2% for life assurance and charges) then that would increase the monthly to £49.04.

arcweld

dunstonh wrote: »

It is highly unlikely that any documentation exists saying that they would pay out £16k. As it is an ISA (or PEP for a period prior to that) and it is Halifax, we know what sort of documentation would exist. This would include an illustration with three projection rates. One would show a shortfall. The other would likely show the target or thereabouts and another show a surplus.

I disagree that it is neglible it will hit target. An amber alert means it needs to achieve a little above target growth rate it hit target but still within the possible range of the investments. 7% a year growth on £6900 would see £11080 over 7 years. That would leave you £4920 short but you are paying monthly premiums into it. Using a 7% target again, you would need to pay £45.66pa. to hit that target.



How much do you pay each month?

Now some of that will go in life assurance and charges but it gives you a ball park figure. If we lowered the anticipated rate of return down to 5% (to allow say 2% for life assurance and charges) then that would increase the monthly to £49.04.

Thanks for your informative reply,

I pay £38.00 per month into the ISA plan, the statement shows 'income earned from the shares, including equalisation 02/07/2011 - 01/01/2012 £57.27'.

dunstonh

arcweld wrote: »

Thanks for your informative reply,

I pay £38.00 per month into the ISA plan, the statement shows 'income earned from the shares, including equalisation 02/07/2011 - 01/01/2012 £57.27'.

If you ask them to put the ISA contribution up to say £50 that would make a diffrence. Or better still, do an overpayment into the mortgage each month.

Amber is telling you that you may miss target. So, heed the warning. You may not miss target but the earlier you prepare for it the better.