Offer of Compensation nearly £7000 then zilch!!!

chocomonsta

Hi all
I took out an endowment mortgage in 1988 for 17,500
did a capital repayment of £11,100 in 1993
fully paid off mortgage (approx) £7000 in 2003 but kept paying the endowment.

I complained to the BBs using the letter on the Endowment Helpline and quite quickly received a letter saying yes I was missold, yes I will be compensated a total of ....£6719.62 :T Fantastic.

Then I read further on; The current surrender value difference of £6,835.00 leaving a FINAL compensation figure of £0.00

So you can imagine me sitting here a little disappointed.

Do I carry on with the complaint, or is that it. I was intending keeping the endowment going until maturity, paying £38.86 a month,which is 2013 or should I cash it in?

I would be very interested to hear your ciews on this. Thanks in advance

dunstonh

So you can imagine me sitting here a little disappointed.

Don't see why. It means your endowment is performing better than a repayment mortgage

Do I carry on with the complaint, or is that it.

Complaints upheld, you are not financially worse off, no compensation. the end

chocomonsta

I was intending keeping the endowment going until maturity, paying £38.86 a month,which is 2013 or should I cash it in?

EdInvestor

Post some figs so we can take a look:

Guaranteed sum assured
Declared bonuses
Surrender value

dunstonh

We would need more information on it to give an answer like that. Where is it invested i.e. what fund(s)? Have you been given any projections, if so, what do they say?

With the mortgage being paid off in 2003 and the endowment providing a surrender value more than the difference it would have been on repayment basis, that does suggest that this is a good endowment and not a bad one. So, I would lean towards keeping it initially but would certainly need to know more about it to make sure. It could be that fund(s) you are in have been good in the past but may be less so in the future, in which case getting out could be the better option.

chocomonsta

Here goes

The endowment was to cover a £16,600 mortgage, which has now been paid off in full.

min sum payable on death before maturity will be 16,600.00 or 4,715.00 with profits, whichever is the greater. It was sold as a Low Cost Endowment and I have no idea what it is invested in

Basic Benefit 7,580.00
Existing Bonus 2,567.35
New Bonus 24.27
Accumulated benefit (2004 statement) 10,171.62

Surrender Value 6,835.00

Taken out with Eagle Star in April 1986 will mature in 2013

Is that enough information? Thank you in advance again

EdInvestor

Ok, if you surrender it and put it in the [email="bank@4%"]bank@4%[/email] also paying in the premiums to maturity, you should end up with 12,770.

That's compared with your guaranteed value of 10,171 - which will increase a little, but not much with bonuses running at 24.27 p.a.

There might be an additional (unguaranteed) terminal bonus.

Have you got a projection there for maturity values @4% and 6%? That should give us an idea of what they think the terminal bonus (if any) might be.

chocomonsta

''If investments grow at 3% 5%

Maturity could be April 2013 £11,000 £12,500

These values include the basic sum assured of £7580.00 and a declared reversionary bonus of £2591.62 as at December 2004''


Thanks again in advance

EdInvestor

The fact that they're are quoting 3% and 5% indicates that this is a pretty poorly performing policy and you'll be lucky to get 4%.

Since you can get that with cash - possibly more as it would go into an ISA over a couple of years - with no risk, looks like it's one for the bin to me.