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Endowment Problem
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adamh123
Posts: 3 Newbie
Hi all,
Please could someone be kind enough to help me with an endowment problem?
I have had a mortgage of £60,000 since 1990 (nationwide). At the outset I had two end endowment policies worth £45,000 and £15,000 respectively (Standard Life). I tried a few years ago to take action against Nationwide for advising me to take out the £45,000 endowment which is only worth half the value. I was unsuccessful as Nationwide said I was time barred and that they had done what they should have.
Now... my question relates to the £15,000 policy (did not include it with the £45,000 complaint as I had completely forgotten about it).
Nationwide seems to have paid out the £15,000 policy into my mortgage in 1990. They did not tell me that as a result my overall endowment would be £15,000 short at the end of the 25 years. I thought that I was paying into a pair of endowments which would cover the costs after the 25 years.
I am left in a situation where not only is my £45,000 endowment worth half that, but the £15,000 is worthless because it was paid out and discontinued. I called Nationwide and they told me that I still have two policies against my £60,000 mortgage but Standard Life told me that the £15,000 was discontinued in 1990.
I really know very little about my rights and any recourse open to me. Please, please, please help me if I can be helped!
Adam
Please could someone be kind enough to help me with an endowment problem?
I have had a mortgage of £60,000 since 1990 (nationwide). At the outset I had two end endowment policies worth £45,000 and £15,000 respectively (Standard Life). I tried a few years ago to take action against Nationwide for advising me to take out the £45,000 endowment which is only worth half the value. I was unsuccessful as Nationwide said I was time barred and that they had done what they should have.
Now... my question relates to the £15,000 policy (did not include it with the £45,000 complaint as I had completely forgotten about it).
Nationwide seems to have paid out the £15,000 policy into my mortgage in 1990. They did not tell me that as a result my overall endowment would be £15,000 short at the end of the 25 years. I thought that I was paying into a pair of endowments which would cover the costs after the 25 years.
I am left in a situation where not only is my £45,000 endowment worth half that, but the £15,000 is worthless because it was paid out and discontinued. I called Nationwide and they told me that I still have two policies against my £60,000 mortgage but Standard Life told me that the £15,000 was discontinued in 1990.
I really know very little about my rights and any recourse open to me. Please, please, please help me if I can be helped!
Adam
0
Comments
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Nationwide have no ability to tell Standard Life to cancel the policy. The only person that can do that is you.
You say you thought you had two endowments. How many direct debits have been going out each month? one or twoI 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.0 -
Nationwide have no ability to tell Standard Life to cancel the policy. The only person that can do that is you.
You say you thought you had two endowments. How many direct debits have been going out each month? one or two
Hi, I had two endowments which were going out through one direct debit in 1990. I used one for paying a deposit on a house and thought that the same endowment (for the same amount) would start again from scratch because nationwide told me (after paying the £15,000 deposit) that my endowment payments in place would cover the £60,000 house. This was my understanding.
I now know that from literally day 1 of purchasing the house I was paying into only a £45,000 endowment for a £60,000 house. When I called up Nationwide today their records still show, as was my understanding, that I had two endowments against the same house worth £60,000 (obviously with a lower maturity value). Their records still show this. However, Standard Life tell me that the £15,000 was fully surrendered by me with no adjustment to the £45,000 in 1990.
I believe that this was not fair purely because I was told that I had two endowments and am still being told this by Nationwide. It was a Nationwide advisor who initially helped me set up my endowment policy with Standard Life. My only issue is that I know I was not told that my £60,000 became only £45,000. If I had known that I would have not hesitated in increasing the endowment.
Am I right to feel this was not proper or was I simply too naive at the outset?0 -
Sorry, but I don't think that you have any chance at all of making a successful complaint about anybody in those circumstances.
Standard Life wouldn't have surrendered your endowment policy in 1990 unless:- You told it to; or
- The policy was assigned to a lender (eg Nationwide) and the lender instructed the sale of the policy because you hadn't been paying your mortgage payments/it was in the process of repossession; or
- You stopped paying premiums to Standard Life; or
- Something really unusual happened (eg a court order required SL to surrender the policy).
Since you seem to have used the surrender proceeds to pay the deposit on your 1990 house, I'm afraid I'd put money on the explanation being that you told Standard Life to surrender the policy and you've since forgotten. It was twenty years ago, and you wouldn't be the first to have done something like that and then forgotten about it!
My guess is that at some stage you told Nationwide that you had two Standard Life endowment policies supporting your mortgage, and Nationwide duly noted that on its records. However, Nationwide wouldn't have had any way of checking up on the policies with Standard Life.
Endowment policies don't just "start up again from scratch" after you've surrendered them/taken the value out of them. It is possible to take out a loan secured on a policy (which can cause policyholders confusion), but it doesn't sound as though you did that - if you had, you'd still have been paying the policy premium.
I think that if you did make a complaint, at some stage somebody would ask you "and how come you didn't notice for 20 years that you weren't paying a second endowment premium to Standard Life?". Unless you've got a very good answer to that question (and tbh I can't think of what a good answer might look like) I think any complaint would be doomed to failure. It sounds as though you did get the benefit of the surrender value twenty years ago, and you've had the benefit each month of the money that you would otherwise have paid towards an endowment - so I don't think that you can now say that Standard Life (or anybody else) should give you a £15k endowment's worth of money.
As to what you do now...it depends on your current circumstances. Do you have £37,500 of outstanding interest only mortgage and no way to pay it? Can you convert part of your debt to repayment/have you already done that? Does your income support the mortgage you do have? I'm not trying to give advice with those questions; just trying to illustrate that it's difficult to help on the information we have.0 -
I agree that it looks like there is no chance based on what said.
You surrendered one endowment to use the surrender proceeds as a deposit for another house. It certainly looks like you misunderstood what needed to be done but I cant see how the lender is to blame (endowment provider certainly isnt). In their eyes you had two endowments fort he correct target amount. The decision to surrender one for you to use the money was your choice and not something they would have advised.
There are other issues working against you. For 20 years you have had statements telling you where the projected figure could be and what its target is. That would have been £45k. So, why in the last 20 years did you not pick it up?Standard Life tell me that the £15,000 was fully surrendered by me with no adjustment to the £45,000 in 1990.
Endowments mostly could not be adjusted. Tax rules meant that any adjustment would have restarted the tax qualification timer. So, apart from a small number of providers, most did top up plans so you would end up with 2, 3 or even more sometimes.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.0 -
Many thanks for your advice and time; it is very much appreciated. Thanks again.0
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