Pension mortgage

cassie_3

Nearly 20 years ago, I was sold a pension mortgage which matures in 3 years. As it is not an endowment we have not received warnings from the mortgage company. The Scottish Amicable fund has not performed well and to pay the mortgage we will have to add cash as 25% allowed from the pension pot is not enough. Does anybody know if we can complain to Scot Am or the Ombudsman, as it seems unfairthat we don't seem to be covered in the same way as an endowment. The original seller of the policy no longer trades, having been sold on several times.

Any advice would be appreciated

dunstonh

if an endowment had been sold 20 years ago you wouldnt be covered either so you are not missing out on anything.

You need to be aware that in real terms, the performance on funds is not much different to 20 years ago. Had you monitored that performance or paid someone to do it for you, then you may not have had a shortfall. With inflation and interest rates coming down, the removal of MIRAS, chages in pension tax relief and the removal of tax credit on pension funds you should have reviewed the pension to make sure that it was on target.

As it was 20 years ago, this is before personal pensions were out. This means you must be on a retirement annuity contract. Typically, retirement annuity contracts pay out a lower tax free lump sum (often between 11-18% of the fund value as they use). If the plan was transferred to a personal/stakeholder pension, you would have access to 25% tax free lump sum. That would reduce and possibly remove any shortfall.

cassie_3

Thanks for the advice. Unfortunately, even though the original seller has been sold on several times, the company that now owns them is still supposed to be looking after our interests. We have moved to personal pensions and are having to put in a considerable amount each month to make the 25% up to the £ 100k we need to pay the mortgage.

StockportGerbil

Hi!
I was missold a private pension which (for a period of time) was being used as the repayment method for the mortgage. As part of the settlement, some compensation was provided.
If you are saying the pension was missold then you can ask for and expect compensation for the mortgage repayment element and take the issue up with the FSO, if you get nowhere with the pensions company.
Regards
Kev

dunstonh

If you are saying the pension was missold then you can ask for and expect compensation for the mortgage repayment element

No he cant.

and take the issue up with the FSO, if you get nowhere with the pensions company.

No he cant.

The issue preventing both of those is that the firm is no longer trading and the advice took place before 1988 when the FSCS came into affect.