endowment mis-selling

k99mn

i would just like to warn people that recieving remuneration for endowement mis-selling is not always as rewarding as some reports suggest. I am currently fighting Halifax/axa over my remuneration figure, originally i was offered the measly sum of £1600.00 on an endowment worth £44.650 this i rejected so they recalculated using their 'other set of figures' which i was warned may be less than was originally offered, the outcome?apparently i am not entitled to anything!!!even though my endowment is underperforming by some £20,000 at present be warned.

dreamylittledream

Your compensation is awarded based on the loss you have made at this point in time - not the projected shortfall on your policy.

In your case although your endowment is under performing (or rather projected to underperform) your policy was only worth £1600 less then you would have repaid under a repayment mortgage had you been correct advice at outset. Thus if you had surrendered the policy and taken the £1600 and converted your mortgage to a capital and interest basis you would have been in the same situation you should have been had you had a repayment mortgage from the beginning.

You requested a recalculation from halifax (did they use assumptions not specifics originally?) and the compensation fell because the surrender value if your policy has probably increased significantly from what it when the original calculation was run. In a rising market (which with the odd fluctuation is what we have been expereincing recently) this is always a danger when recalculating redress.

The good news (or kind of good news) is that you actually have not lost out at all now by having an endowment motgage (providing you stop the policy and pay the lump sum off your mortgage, converting to repayment). The bad news of course is that additional £1600 isn't coming back.

Your choice now really is whether to continue using a risk based investment to repay your mortgage (you've seen the policy can increase in value, but can decrease or fail to repay the loan at the end) or convert to repayment whilst you have not made any financial loss.

dunstonh

Seems like the endowment is not as far off track as the illustrations suggest. That is not unusual as the illustrations show example growth rates. They are not reflective of the potential of the funds you are invested in. The performance could be a lot better or a lot worse depending on where you invest.

As already said above, the redress is to put you in the position you would be had you been on a repayment mortgage (which is what you complained about after all). With a recovering stockmarket over the last couple of years, redress has been falling as the value of unit linked endowments recovers with it.