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Miss-sold Endowment - But time has moved on

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Does endowment miss-selling compensation take into account what has happened wrt one's personal circumstances since it was miss-sold? Would the outcome of the miss-selling investigation be any different had the sun shone on me and I had won the lottery:T or had I continued as an unsuccesful purveyor of chocolate fireguards?:confused:

If I don't complete my Mortgage Questionnaire will the company (Std Life) just use their assumptions guide to investigate my case? If this is the case, a lottery winner shouldn't fill it in whereas, a pyro-confectioner (manufacturer of chocolate fire-guards) should fill it in!

To be brief. I was sold an endowment 17 years ago. In the interim I have sold that house, purchased another house and now the endowment is not related to any mortgage. I kept it as a saving policy. Will I be due any compensation?

Comments

  • dunstonh
    dunstonh Posts: 119,641 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I kept it as a saving policy. Will I be due any compensation?

    If complaint is upheld, then any redress is calculated upto the point you no longer used the endowment against a mortgage. If this was before 2001, then there may not be much, if any redress.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • fliss
    fliss Posts: 31 Forumite
    Hi Triumph,I would say give it a go,my circumstances are very similar to yours.
    I took out a small endowment in 1993 to cover a mortgage when I got divorced.The endowment was only used to cover a mortgage for a few years but I still kept the endowment on as a savings policy.
    I have just received a cheque for just under 2 grand, I nearly didn't bother as I didn't think it would be worth the hassle,but I'm so glad that I did now:j
  • dunstonh wrote:
    If complaint is upheld, then any redress is calculated upto the point you no longer used the endowment against a mortgage. If this was before 2001, then there may not be much, if any redress.

    I do wish you stop saying this dunstoh - the redress calcualtion depends on why the policy is no longer linked to a mortgage and this can make a significant difference to the compensation. Its certainly not true that becuase a policy became decoupled from a mortgage before 2001, the compensation will be negligable - it is only true that if it was still linked to the mortgage it is likely to have been higher.

    It also inevitably depends on who the policy was with...
    Who's going to fly your plane? / When you need to make your getaway....
  • dunstonh
    dunstonh Posts: 119,641 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I do wish you stop saying this dunstoh - the redress calcualtion depends on why the policy is no longer linked to a mortgage and this can make a significant difference to the compensation. Its certainly not true that becuase a policy became decoupled from a mortgage before 2001, the compensation will be negligable - it is only true that if it was still linked to the mortgage it is likely to have been higher.

    It also inevitably depends on who the policy was with...

    Sorry, can you provide some evidence of that. Everything I have seen has said that when the endowment is no longer being used against a mortgage, that is the point the redress, if any, is calculated to.

    Until 2001 virtually all endowments were on track to provide a surplus. So, redress, if calculated before 2001 is likely to be lower or non existent compared to cases calculated to a date after 2001. Just as many endowment redress cases now are getting less than they would have done 2 years ago.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • dunstonh wrote:
    Sorry, can you provide some evidence of that. Everything I have seen has said that when the endowment is no longer being used against a mortgage, that is the point the redress, if any, is calculated to.

    Until 2001 virtually all endowments were on track to provide a surplus. So, redress, if calculated before 2001 is likely to be lower or non existent compared to cases calculated to a date after 2001. Just as many endowment redress cases now are getting less than they would have done 2 years ago.

    But of course:

    http://www.financial-ombudsman.org.uk/publications/guidance/mtge_endowment_redress.htm

    Examples 2 & 4

    In essence a 'cap' (where liability stops and a historic surrender value is applied) should only be used where the customer converted to repayment or repaid the mortgage due to RISK. If conversion happened before 2001 it is unlikely to have been becuase of knowledge of risk (although the first FP, Guardian and Zurich letttrs went out in 2000) so the other methods are more appropropriate.

    Remember a refund of premiums during the years of falling markets is likely to be beneficial.

    You are also assuming that the surrender value of the policy (which is used not the 'actual value' of a with profits policy) would be greater then the capital repaid on a repayment mortgage with interest added up to the date of cap. Frequently it isn't - being 'on track' is not the same thing.

    You are correct that redress will probably be less then if the policy was still being used in conjunction with the mortgage but it is certainly not the case that compensation will be neligiable in the majority of claims as you imply.
    Who's going to fly your plane? / When you need to make your getaway....
  • Dunston

    For policies that were stopped after a few years, even before 2001 the compensation is often surprisingly high by comparison to the term and investment. Rememeber that many of these plans had awful initial allocation periods when little if anything was invested. To the calculated loss is added interest which is often higher than the investment return acheived by the company in question.
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