Endowment Ostrich Alert - More advice needed.

Drantley_Gicks

I have just recieved my first red alert on my endowment and could do with some advice before I rush off and make another mistake.

I have already complained once a few years ago, got the standard "up yours, we covered our behinds by making you sign a peice a paper at the time" letter from Norwich Union. Because we were not predicted a shortfall, I left it there.

Since then I have been told that the endowment companies generally do this and it's not until FSA step in that they will do anything.

What do I do now?

1. Do I complain again?
b. Am I allowed to do that again?

2. Cash in the endowment and start making overpayments using the moeny paid on the endowment + some?

3. Keep paying into the endowent and pay extra lumps off the loan to make the difference. This would only be a small amount in the begining as Mrs Drantley Gicks is expecting our second and I can't see us being able to raise to much cash.

I now feel very angry, let down and as my predicted amount gets less every year I am reluctant to give NU more money, but I will not cut off my nose to spite my face, so I need help!

I presume some of the funds profits are being used to pay off those who were sensible enough to appeal to FSA, and the ostriches are picking up the tab?

Help needed big time, before I have to discuss it with my wife and those pesky hormones!


I have a 25 Endowment (with profits) with Norwich Union (originally with CGU).

Details:

Start date - 08/08/97
Maturity Date - 08/08/22
Contributions - £88.92
Target - £49,672

Predictions:

4% £33,500 (-£16,172)
6% £42,400 (-£7,272)
8% £49,672


Ta in advance.

DG

dunstonh

Since then I have been told that the endowment companies generally do this and it's not until FSA step in that they will do anything.

The FSA do not step in at any point during an individual complaint. They only look at widespread issues or things picked up during compliance inspections or fraud.

What do I do now?

1. Do I complain again?
b. Am I allowed to do that again?

When you complained before, you would have been given 6 months to take the complaint to the FOS if you disagreed. If you are still within that 6 months, you can do that. If not, your time has passed.

2. Cash in the endowment and start making overpayments using the moeny paid on the endowment + some?

Seeing as the endomwent is on track if 8% achieved, it may be worth holding on at least until 2008 to get the orphan funds distribution and making a review of the position from there.

3. Keep paying into the endowent and pay extra lumps off the loan to make the difference. This would only be a small amount in the begining as Mrs Drantley Gicks is expecting our second and I can't see us being able to raise to much cash.

Seems a good idea.

I now feel very angry, let down and as my predicted amount gets less every year I am reluctant to give NU more money, but I will not cut off my nose to spite my face, so I need help!

Dont rely on the projections. The figures keep changing and I would have expected an NU one to have improved over the last 12/24 months.

In reality, 1997 policy is never going to have much of an indication of how good/bad it is at this stage. You would expect it to be in a position of shortfall even if it was a good one.

EdInvestor

What is the present surrender value?

Drantley_Gicks

dunstonh,

Thanks for the advice.

1. I may of got the FSA mixed up with the ombudsmun, however at least I know complaining is now out of the questions.

2. From your advice/opinion I think it is prudent to hang a couple more years to see what happens, what would be the best time to consider cashing in endowments ie what is a far amount of time to judge there performance?

3. After my wife goes back to work following maternity leave I will start making overpayments as insurance. Without making someone create a spredsheet how much would anyone estimate I would need to overpay on my mortgage?

Info:

£110,000 Mortgage
£60,000 Intrest and Capital - End 08/08/22
£50,000 Endowmnent - End 08/08/22

Shortfall £16,000
Start overpayments of £X April 2008 until 08/22?

Edinvestor

I haven't got a surrender value yet, following the advice above I'll hang on until a sensible time.

Thanks for the reply though.

DG - Slowly calming down and not quite as nervous!!!!!!

EdInvestor

Hi DG

The reason I wanted to know the surrender value was so I could do a calculation to work out if you are better to surrender/sell it or to keep it.

Nobody can even make a general stab at suggesting what you should do with it without knowing the surrender value of the policy right now.

Nor can you know what to do about any shortfall in the absence of this vital bit of info.

Just ring up on Monday, they will tell you on the phone.