Advice on Parents Endowment policy

inked

Found out today that my Mum and Dad have received a letter regarding the endowment policy with Standard Life ( I have not yet had chance to see the letter).

They took out the policy along side their interest only mortgage about 25 years ago and it will mature later this year (final mortgage payment is due Nov next year)

My parents had figured that the policy would cover the final payment on the mortgage (the capitol of £30k) and while the overall policy looks as though total value will be £40k the letter they have received seems to state that the actual lump sum payment they will receive will be 25% of the total with the rest to be paid as a pension to my father.

Obviously this has left them feeling quite distressed as although they have enough savings to cover the mortgage payment (with the 25% lump sum)

Does this seem correct or does it sound as though they have misunderstood the letter?

Is there anything they can do to maximize the amount they will receive as a lump sum?

I will be looking over the letter on Thursday so can post what it states at the weekend if anyone thinks it may help.

Any advice or help would be appreciated loads.

Vince

opinions4u

Sounds like the letter relates to a pension, not an endowment. Is it possible that he has both a pension and an endowment?

More detail needed so that readers can understand exactly what suggestions are appropriate.

inked

It looks as though it may be a pension plan rather than an endowment, my parents may have taken it out by mistake.

EdInvestor

In those days there was something called a 'pension mortgage', an alternative to an endowment.Looks like that is what they have.

dunstonh

Was it bought under advice at the time or did your parents buy direct?

inked

dunstonh wrote: »

Was it bought under advice at the time or did your parents buy direct?

They say they were advised, but it was so long ago they can't remember who it was. Would there be any note of it anywhere?

opinions4u

If it was taken out 25 years ago the sale would have been made before the Financial Service Act protection came in.

Getting compensation for this may not be easy.

EdInvestor

Look on the annual statement - if there is an advisor involved it should be mentioned there.If there isn't, it may have been 'technically' sold by SL, in which case you can complain to them and they will consider it.

inked

Mums given me the latest paperwork (not the original stuff from when it was taken out) and it states it is a Retirement Annuity contract. It states that Standard Lifes records show Mercer Employee Benefits Ltd is their financial advisor, I'm guessing this is who they should complain to?

dunstonh

inked wrote: »

Mums given me the latest paperwork (not the original stuff from when it was taken out) and it states it is a Retirement Annuity contract. It states that Standard Lifes records show Mercer Employee Benefits Ltd is their financial advisor, I'm guessing this is who they should complain to?

If its a Retirement Annuity Contract that means its pre regulation and as it was sold by what is now an IFA then they will reject any complaint as your parents are not protected with the consumer protection that came in on 29th April 1988.

It does seem strange that your parents seem to think this is linked to the mortgage. Pension mortgages didnt typically get linked with mortgages until personal pensions came in. Not retirement annuity contracts Also, the IFA you mention tends to deal with employer schemes which possibly suggests that this was arranged through the workplace. It may be that Mercer inherited the scheme through takeovers through the years though.

LeafyBarnet

... and in which case, what's taking care of the capital on the interest-only mortgage?