Sun Life Pension Mortgage data wanted

ROSEY

Please can anyone help? I am researching an old type of mortgage security policy. It used to be sold in 1984 by Sun Life. It was called the Pension Mortgage policy and only people in business could get one. It was not the same as an endowment policy but I think it was a security for a mortgage but with a pension when the mortgage was paid off.
I can't find any information about it. What was it and how did it work? Was is assigned / linked to the mortgage. If it was a joint mortgage, did a couple have to take out a policy each or just one of them? Has anyone kept a promotional leaflet about it that they wouldn't mind sharing?
All data appreciated. Thanks
Rosey

kingstreet

Sun Life is now part of Axa, so you could start by enquiring to them. AFAIK the Sun Life stuff is still dealt with from Bristol.

Back in 1984, S226 Retirement Annuity contracts (the foreruner to the Personal Pension Plan) could be used to repay a mortgage, with the 1/3 tax-free cash payment making that possible. The other 2/3 of the fund would be used to purchase an annuity.

A S226A life policy could be taken out to repay the mortgage on death. Effectively, this was term assurance where you got tax relief on the premium payments.

Neither contract could be assigned. These were in a single name only. It's the most likely explanation for what you're trying to find.

Executive Pension Plans were also used as a potential mortgage repayment vehicle, but this is less likely than the above.

kingstreet

If you are trying to track down lost pensions, this might be of help;-

http://www.uar.co.uk/

ROSEY

Thank you Kingstreet. But are you able to tell me then how any such policy gave security to a mortgage if it wasn't assigned to the lender? How could the mortgage lender be assured of their capital repayment? Surely without an agreement or the policy being assigned to the lender, the purchaser of the policy could stop paying. The policy would work for a single man say, but what if he was married and got divorced? It all seems a bit 'wobbly'. I don't know if you can answer this, if not, well thanks anyway. Are there any comparative mortgages these days that I could study? Rosey.

dunstonh

are you able to tell me then how any such policy gave security to a mortgage if it wasn't assigned to the lender?

No. Pensions are a master trust and cannot be assigned to a lender. However, they could be "packaged" so you had two products effectively. The mortgage and the pension.

How could the mortgage lender be assured of their capital repayment?

They couldnt. However, the same applies to endowments, PEPs and ISAs.

It all seems a bit 'wobbly'.

It was and that is why you didnt see many people do them in the end. It was a good idea in theory and actually could work but it needed constant reviews and a more sophisticated investor and adviser.

Are there any comparative mortgages these days that I could study?

A personal pension and interest only mortgage is the modern equivalent but you wont find anyone doing it officially. Those days have gone.

ROSEY

Thank you Kingstreet for giving me answers and something to go on. Much appreciated. Rosey.

magpiecottage

ROSEY wrote: »

are you able to tell me then how any such policy gave security to a mortgage if it wasn't assigned to the lender? How could the mortgage lender be assured of their capital repayment? Surely without an agreement or the policy being assigned to the lender, the purchaser of the policy could stop paying.

In fact, by the mid 1990s few lenders took assignments of endowment policies either - they simply took the view that if there was nothing in place to repay the loan then either interest would continue to be paid (saving them the effort of lending it to somebody else) or they would sell the house (which by then would be worth far more than the loan) and get their money back.