Mortgage ?? mis selling help

ipri

We are £20000 short in our endow. mortgages...how do I know if this is just a stock market problem or a case for complaint?? Thanks Ian

dunstonh

Every single case of endowment shortfall projections is linked to stockmarket.

Its just a case of whether you knew that it was linked to stockmarket performance when you started, or not.

Had the economy continued its historical process of boom and bust along with higher than average inflation, endowments would still be paying out surpluses. There wouldnt be a single complaint. The economy changes, the stockmarket takes a dive and people complain. Some are geniune and should never have been on endowment in the first place or were not aware of the risks. Others knew the risks but have taken advantage of really stupid complaints process that allows them to get compensation based on todays balances and not what the maturity value will finally be.

Potentially, if your endowment is unit linked and you have more than 10 years to go, this drop in the stockmarket is a good thing as you are now buying the units much cheaper. However, you will show a shortfall as what you have bought in the past was bought high and dropped.

Also, the FSA lowered the growth rate requirements for projections on endowments to 4 6 and 8%. Most endowments would have been set up when 5,7 & 9 (or higher) was the normal. So, an endowment projected to grow at an average of 7% a year now has to project forwards at 6%. So obviously there is going to be a shortfall showing. Doesnt mean there will be one though.

You have to decide if you knew that the endowment was linked to stockmarket and would fluctuate in the interim and may or may not hit target. Or, you can jump on the bandwagon and get compensation whether or not you are really entitled to it.