compensation received for mis-selling-what now!

silver7

Firstly i would like to say thankyou to everybody for giving me the courage to apply for mis-selling, much appreciated. I would welcome now any advice as to what steps to take next, i just don't know what to do. I have 2 endowment polices with Legal and General:-

1. Policy started in Oct 1988 to repay £51,150, last projected shortfalls were: 4 % £12,850 6 % £7,050 8 % £1,350
This was a low start policy of which i pay £80.00. Leg & Gen have offered me £26,055.82 which includes compensation of £1,082.12

2. Policy started Sept 1989 to repay £8,850, last projected shortfalls were:
4 % 2,340 6 % £1,380 8 % £310
For this policy i pay £13.00 a month. Leg & Gen have offered me £4,495.19 which includes compensation of £352.09.

If i cashed these in now i would would get a total of £30,551.01, these were to pay my mortgage of £60,000. Both policies were due to mature in Oct 2013. (6 1/2 years to go)I have an interest only mortgage with Nationwide at 4.99% fixed until Oct 08 and have been overpaying on the mortgage to compensate for the shortfalls which has brought it down to about £35,000 outstanding. Any ideas of which way i go now! Should i take the money and run!!

EdInvestor

Probably, but just post a few figs so we can be sure

Guaranteed sum assured
Dedclared bonuses
Surrender value ( excl compo)
Monthly premium
Maturity date

silver7

Thanks EdInvester for having a look at this for me, details as follows:-

1. Maturity date Oct 2013 (This was a 5 year low start premium)
Monthly premium £75.70
Surrender value £26,055.82
Guaranteed sum assured £51,150.00
Existing bonuses 31/12/2004 £5,652.00
Basic sum assured £15,652.00

2. Maturity date Oct 2013
Monthly premium £13.00
Surrender value £4,495.19
Guaranteed sum assured £8,850
Existing bonuses 31/12/2004 £1,506.90
Basic sum assured £2,877.00

silver7

Sorry i posted the surrender values with the compensation added in:-
1. Should read £24,973.70

2. Should read £4,143.10

EdInvestor

If you surrender this pair and put them on deposit @4% to maturity also paying in the premiums you should get 40,222 for the large one, compared with their projection of 38,300, and 6,711 for the small once, compared with their projection of 6,510.

That's a guarnteed return compared with a risk return - thpugh the latter does include life cover .A higher guaranteed return (of 4.99%) can be obtained by throwing all this money plus the compo at your mortgage, which is what I suggest you do.

There's really no point in taking a risk for returns that are projected to be lower than safe investments like cash unless you need the life cover and would have a problem replacing it at reasonable cost.

silver7

Thanks EdInvestor for that info will now find out what my penalties will be with Nationwide for making a large sum overpayment.